Problem 7-20 (Algo) Evaluating the Profitability of Services (L07-2, L07-3, L07-4, L07-5) Gallatin Carpet Cleaning is a small, family owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat foe per hundred square feet of carpet cleaned. The current fee is $22.20 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers--particularly those located on remote ranches that require considerable travel time. The owner's daughter, home for the summer from college, has suggested investigating this question using activity based costing After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below: Activity Control Cleaning carpets Travel to jobs Job support Other (organization-sustaining costs and Idle capacity costs) Activity Measur Square feet cleaned (0) Miles driven Number of joba Activity for the Year 14,000 hundred square feet 71,500 miles 1,900 joba Not applicable The total cost of operating the company for the year is $355,000 which includes the following costs. Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses office expenses President's compensation Total cost $141.000 31.000 19,000 36.000 $6,000 72.000 $155.000 Resource consumption is distributed across the activities as follows: Distribution of resource Consumption Cross Activities Cleaning Travel Carpets to be Haga 781 120 cleaning supplies 1000 08 Cleaning equipment depreciation 718 Vehicle expenses 01 01 ottice expenses 01 DE Tresident's compensation os 00 Job Support 08 00 08 Other 100 08 2:98 Total 1000 100 2001 100 1004 1605 365 543 265 Job support consists of receiving Calis from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on. Required: 1. Prepare the first stage allocation of costs to the activity cost pools 2. Compute the activity rates for the activity cost pools 3. The company recently completed a 800 square foot carpet cleaning job at the Flying N Ranch-a 58-mile round-trip journey from the company's offices in Bozeman Compute the cost of this job using the activity-based costing system 4. The revenue from the Flying N Ranch was $177.60 (800 square feet $22.20 per hundred square feet). Calculate the customer margin earned on this job Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Required 4 Prepare the first stage allocation of costs to the activity cost pools Cleaning Carpets Travel to Jobs Job Support Other Total Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate Cleaning carpets per hundred square feet Travel to jobs per mile Job support per job Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 The company recently completed a 800 square foot carpet-cleaning job at the Flying N Ranch-58-mile round-trip Journey from the company's offices in Bozeman, Compute the cost of this job using the activity-based costing system. (Round your intermediate calculations and final answer to 2 decimal places.) Cont of the job Complete this question by entering your answers in the tabs below. Required: Required 2 Required a Required 4 The revenue from the Flying N Ranch was $177.60 ( hundred square feet @ $22.20 per hundred square feet). Calculate the customer margin earned on this job. (Negative customer margins should be indicated with a minus sign. Round your intermediate calculations and final answers to 2 decimal places.) Customer margin