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 $2225 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 for the Year Activity Cost Pool Cleaning carpets Travel to jobs Job support Other (organization-sustaining costs and idle capacity costs) Activity Measure Square feet cleaned (ees) -13,500 hundred square feet 300,000 miles 1,700 jobs Miles driven Number of jobs None Not applicable The total cost of operating the company for the year Is $347,000 which Includes the following costs: $ 144,00e Wages Cleaning supplies cleaning equipment depreciation Vehicle expenses Office expenses President's compensation 32,000 8,e0e 26, e00 56,eee 81, eee S 347,e0e Total cost Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Travel to Jobs 11 Job Support Other Total Carpets 78% wages Cleaning supplies Lleaning equipment depreciation Vehicle expenses 11% 1eer 100% es zex 81% 19% OFfice expenses 64% 36% 1ees President's compensation 33% 67% 1e0x Job support consists of recetving 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-cieaning Job at the Flying N Ranch-a 55-mile round-trlp journey from the company's offices In Bozeman. Compute the cost of this (ob using the activity-based costing system
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 $2225 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 for the Year Activity Cost Pool Cleaning carpets Travel to jobs Job support Other (organization-sustaining costs and idle capacity costs) Activity Measure Square feet cleaned (ees) -13,500 hundred square feet 300,000 miles 1,700 jobs Miles driven Number of jobs None Not applicable The total cost of operating the company for the year Is $347,000 which Includes the following costs: $ 144,00e Wages Cleaning supplies cleaning equipment depreciation Vehicle expenses Office expenses President's compensation 32,000 8,e0e 26, e00 56,eee 81, eee S 347,e0e Total cost Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Travel to Jobs 11 Job Support Other Total Carpets 78% wages Cleaning supplies Lleaning equipment depreciation Vehicle expenses 11% 1eer 100% es zex 81% 19% OFfice expenses 64% 36% 1ees President's compensation 33% 67% 1e0x Job support consists of recetving 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-cieaning Job at the Flying N Ranch-a 55-mile round-trlp journey from the company's offices In Bozeman. Compute the cost of this (ob using the activity-based costing system
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 44P
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Question
They said to ask the other part of question in another request?
![Gallatin Carpet Cleaning is a small, famly-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 $22.25 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
Cleaning carpets
Travel to jobs
Job support
Other (organization-sustaining costs and idle
capacity costs)
Activity Measure
Square feet cleaned (90s)
Activity for the Year
-13,500 hundred square feet
300,000 miles
1,700 jobs
Miles driven
Number of jobs
None
Not applicable
The total cost of operating the company for the year is $347,000 which Includes the following costs:
24
Wages
Cleaning supplies
cleaning equipment depreciation
Vehicle expenses
144,000
32,000
8,000
26, 000
56, 000
office expenses
81, eee
$ 347, 000
President's compensation
Total cost
Resource consumption is distributed across the activitles as follows:
Distribution of Resource Consumption Across Activities
Cleaning
Travel
Carpets
78%
to Jobs
11%
Job Support Other
11%
Total
wages
Cleaning supplies
Cleaning equipment depreciation
Vehicle expenses
Office expenses
President's compensation
0%
1e0%
100%
1ee%
70%
0%
0%
30%
1e0%
81%
19%
100%
0% e%
64%
36%
0%
33%
67%
100%
Job support consists of recetving calls from potential customers at the home office, scheduling Jobs. billing, resolving sues, 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ad6af2d-5a67-42f5-a474-673e389551ed%2Fc7e53ca6-8ab2-41ac-8a18-a12ccbbf8770%2Ffn5eleh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Gallatin Carpet Cleaning is a small, famly-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 $22.25 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
Cleaning carpets
Travel to jobs
Job support
Other (organization-sustaining costs and idle
capacity costs)
Activity Measure
Square feet cleaned (90s)
Activity for the Year
-13,500 hundred square feet
300,000 miles
1,700 jobs
Miles driven
Number of jobs
None
Not applicable
The total cost of operating the company for the year is $347,000 which Includes the following costs:
24
Wages
Cleaning supplies
cleaning equipment depreciation
Vehicle expenses
144,000
32,000
8,000
26, 000
56, 000
office expenses
81, eee
$ 347, 000
President's compensation
Total cost
Resource consumption is distributed across the activitles as follows:
Distribution of Resource Consumption Across Activities
Cleaning
Travel
Carpets
78%
to Jobs
11%
Job Support Other
11%
Total
wages
Cleaning supplies
Cleaning equipment depreciation
Vehicle expenses
Office expenses
President's compensation
0%
1e0%
100%
1ee%
70%
0%
0%
30%
1e0%
81%
19%
100%
0% e%
64%
36%
0%
33%
67%
100%
Job support consists of recetving calls from potential customers at the home office, scheduling Jobs. billing, resolving sues, 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.
![Resource consumptlon Is distributed across the activitles as follows:
Distribution of Resource Consumption Across Activities
Cleaning
Carpets
Travel
to Jobs
Job Support Other
Total
78%
100%
11%
Wages
Cleaning supplies
Cleaning equipment depreciation
Vehicle expenses
Office expenses
President's compensation
11%
0%
100%
0%
0%
0%
100%
70%
0%
0%
30%
100%
0%
81%
0%
19%
100%
0%
0%
64%
36%
100%
0%
0%
33%
67%
100%
Job support consists of recelvVing calls from potentlal customers at the home office, scheduling Jobs, billing, resolving Issues, and s
on.
Required:
1 Prepare the first-stage allocatlon 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-básed costing system.
4. The revenue from the Flying N Ranch was $44.50 (200 square feet @ $22.25 per hundred square feet). Calculate the customer
margin earned on this 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 200 square foot carpet-cleaning job at the Flying N Ranch-a 55-mile round-trip journey
from the comnpany'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.)
Cost of the job](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ad6af2d-5a67-42f5-a474-673e389551ed%2Fc7e53ca6-8ab2-41ac-8a18-a12ccbbf8770%2Fpm525i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Resource consumptlon Is distributed across the activitles as follows:
Distribution of Resource Consumption Across Activities
Cleaning
Carpets
Travel
to Jobs
Job Support Other
Total
78%
100%
11%
Wages
Cleaning supplies
Cleaning equipment depreciation
Vehicle expenses
Office expenses
President's compensation
11%
0%
100%
0%
0%
0%
100%
70%
0%
0%
30%
100%
0%
81%
0%
19%
100%
0%
0%
64%
36%
100%
0%
0%
33%
67%
100%
Job support consists of recelvVing calls from potentlal customers at the home office, scheduling Jobs, billing, resolving Issues, and s
on.
Required:
1 Prepare the first-stage allocatlon 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-básed costing system.
4. The revenue from the Flying N Ranch was $44.50 (200 square feet @ $22.25 per hundred square feet). Calculate the customer
margin earned on this 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 200 square foot carpet-cleaning job at the Flying N Ranch-a 55-mile round-trip journey
from the comnpany'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.)
Cost of the job
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