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Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana, For its services, the company has always charged a flat fee per

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Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana, For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $22.10 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 Cost Pool Activity Measure Activity for the Year Square feet cleaned hundred square Cleaning carpets (00s) 12,500 feet Travel to jobs Miles driven 186,000 miles Job support Number of jobs 1,600 jobs Other (organization- sustaining costs and idle capacity costs) None Not applicable The total cost of operating the company for the year is $352,000 which includes the following costs: Wages $140,000 Cleaning supplies 21,000 Cleaning equipment depreciation 13,000 Vehicle expenses 35,000 Office expenses 68,000 President's compensation 75,000 Total cost $352,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Travel Cleaning to Job Carpets Jobs SupportOther Wages 73% 16% 04 Cleaning supplies 100% 0% 0% 0% Cleaning equipment depreciation 73% ex 0% 27% Vehicle expenses 0% 82% 84 Office expenses 184 0% 0% 57 43% President's compensation 0% 33% 67% 11% Total 100 1004 100% 100 100% 100% Job support consists of receiving calls 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 200 square foot carpet-cleaning job at the Flying N Ranch-a 55-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 $44.20 (200 square feet a $22:10 per hundred square feet). Calculate the customer margineamed on this job

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