Required 1Required 2Required 3Required 4Prepare the first-stage allocation of costs to the activity cost pools.CleaningCarpetsTravel toJobsJob SupportOtherTotalWagesCleaning suppliesCleaning equipment depreciationVehicle expensesOffice expensesPresident's compensationTotal cost< Required 1Required 2 >Required 1Required 2Required 3Required 4Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.)Activity Cost PoolActivity Rateper hundred square feetper mileper jobCleaning carpetsTravel to jobsJob support< Required 1Required 3 >Required 1Required 2Required 3Required 4The company recently completed a 400 square foot carpet-cleaning job at the Flying N Ranch-a 56-mile round-trip journeyfrom the company's offices in Bozeman. Compute the cost of this job using the activity-based costing system. (Round yourintermediate calculations and final answer to 2 decimal places.)Cost of the job< Required 2Required 4 >Required 1Required 2Required 3Required 4The revenue from the Flying N Ranch was $93.80 (4 hundred square feet @ $23.45 per hundred square feet). Calculate thecustomer margin earned on this job. (Negative customer margins should be indicated with a minus sign. Round yourintermediate calculations and final answers to 2 decimal places.)Customer margin< Required 3Required 4 >%24 Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company hasalways charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.45 per hundred square feet. However,there is some question about whether the company is actually making any money on jobs for some customers-particularly thoselocated on remote ranches that require considerable travel time. The owner's daughter, home for the summer from college, hassuggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting offour activity cost pools. The activity cost pools and their activity measures appear below:Activity Cost PoolCleaning carpetsTravel to jobsJob supportOther (organization-sustaining costs and idlecapacity costs)Activity MeasureSquare feet cleaned (00s)Miles drivenNumber of jobsActivity for the Year10,500 hundred square feet389,000 miles2,000 jobsNoneNot applicableThe total cost of operating the company for the year is $364,000 which includes the following costs:$ 149,000WagesCleaning suppliesCleaning equipment depreciationVehicle expensesOffice expensesPresident's compensation30,0006,00035,00068,00076,000$ 364,000Total costResource consumption is distributed across the activities as follows:Distribution of Resource Consumption Across ActivitiesCleaning TravelCarpets to JobsJobSupportOtherTotalWagesCleaning suppliesCleaning equipment depreciationVehicle expensesOffice expensesPresident's compensation75%14%0%11%100%100%0%0%0%100%66%0%34%100%0%75%0%25%100%0%0%56%44%100%0%0%31%69%100%Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and soon.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-a 56-mile round-trip journey fromthe 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 $93.80 (400 square feet @ $23.45 per hundred square feet). Calculate the customermargin earned on this job.

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-a 56-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 $93.80 (400 square feet e $23.45 per hundred square feet). Calculate the customer margin earned on this job.

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-a 56-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 $93.80 (400 square feet e $23.45 per hundred square feet). Calculate the customer margin earned on this job.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter15: Choice Of Business Entity—other Considerations

Section: Chapter Questions

Problem 89TA

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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 $23.45 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 Cleaning carpets Square feet cleaned (00s) 12,000 hundred square feet Travel to jobs Miles driven 404,000 miles Job support Number of jobs 2,000 jobs Other (organization-sustaining costs and idle…
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