Answered step by step
Verified Expert Solution
Question
1 Approved Answer
***URGANT*** 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
***URGANT***
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 $22.45 per hundred square feet. However. there is some question about whether the company is actually making any money on jobs for some customers-particulatly 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 actliity measures appear below: The total cost of operating the company for the year is $339.000 which includes the following costs: Resource consumption is distributed across the activities as follows: 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 400 square foot carpet-cleaning job at the Flying N Ranch 52 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 $89.80 (400 square feet a $22.45 per hundred square feet). Calculate the customer margin earned on this job. Complete this question by entering your answen in the tabs below. Prepare the first-stage allocation of costs to the activity cost pools. 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 $22.45 per hundred square feet. However. there is some question about whether the company is actually making any money on jobs for some customers-particulatly 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 actliity measures appear below: The total cost of operating the company for the year is $339.000 which includes the following costs: Resource consumption is distributed across the activities as follows: 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 400 square foot carpet-cleaning job at the Flying N Ranch 52 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 $89.80 (400 square feet a $22.45 per hundred square feet). Calculate the customer margin earned on this job. Complete this question by entering your answen in the tabs below. Prepare the first-stage allocation of costs to the activity cost poolsStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started