see attached 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 $23.60 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 andidle capacity costs)Activity for the Year10,500 hundred square feet379,500 miles1,700 jobsActivity MeasureSquare feet cleaned (00s)Miles drivenNumber of jobsNoneNot applicableThe total cost of operating the company for the year is $349,000 which includes the following costs: $WagesCleaning suppliesCleaning equipment depreciationVehicle expensesOffice expenses140,00029,00012,00033,00062,00073,000President's compensationTotal cost$ 349,000Resource consumption is distributed across the activities as follows:Distribution of Resource Consumption Across ActivitiesCleaningTravelJobCarpetsto JobsSupportOtherTotal79%13%0%8%100%WagesCleaning suppliesCleaning equipment depreciationVehicle expenses100%0용0응100%72%0응0응28%100%0응76%0%24%100%Office expenses0%0%60%40%100%President's compensation0%0용31%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 600 square foot carpet-cleaning job at the Flying N Ranch-a 55-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 $141.60 (600 square feet @ $23.60 per hundred square feet). Calculate the customermargin earned on this job.0 o 00

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 $23.60 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 (00s) Miles driven Activity for the Year 10,500 hundred square feet 379,500 miles 1,700 jobs Number of jobs None Not applicable The total cost of operating the company for the year is $349,000 which includes the following costs:

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 $23.60 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 (00s) Miles driven Activity for the Year 10,500 hundred square feet 379,500 miles 1,700 jobs Number of jobs None Not applicable The total cost of operating the company for the year is $349,000 which includes the following costs:

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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