Please answe the follow question! Please fill in all information.. Gallatin Carp

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Please answe the follow question! Please fill in all information..

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-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, a simple system consisting of four activity cost pools seemed to be adequate. The activity cost pools and their activity measures appear below Activity Cost Pool Activity Measure Activity for the Year 10,000 hundred square feet Square feet cleaned (00s) Miles driven Cleaning carpets Travel to jobs Job support Other (costs of idle capacity and 358,500 miles 2,100 jobs Number of jobs organization-sustaining costs) Not applicable The total cost of operating the company for the year is $344,000, which includes the following costs: Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation $150,000 25,000 7,000 28,000 60,000 74,000 Total cost $ 344,000 Resource consumption is distributed across the activities as follows Distribution of Resource Consumption Across Activities Cleaning Travel to Job Other 13% 0% 33% 20% 37% 73% Total 100% 100% 100% 100% 100% 100% Support 0% 0% CarpetsJobs Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation 74% 100% 67% 0% 0% 0% 13% 0% 0% 63% 27% 0% Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Explanation / Answer

STATEMENT SHOWING FIRST STAGE ALLOCATION OF COST TO ACTIVITY POOL BASIS OF Cleaning Travel to job Job Support Others Total APPORTION In $ IN $ IN $ IN $ IN $ Wages 74:13:0:13 111,000 19,500 0 19,500 150,000 Cleaning and supplies 100:0:0:0 25,000 0 0 0 25,000 Deprecctaion 67:0:0:33 4,690 0 0 2,310 7,000 Vehicle expense 0:80:0:20 0 22,400 0 5,600 28,000 Office expense 0:0:63:37 0 0 37,800 22,200 60,000 Presidents compensation 0:0:27:73 0 0 19,980 54,020 74000 TOTAL COST OF ACTIVITY 140,690 41,900 57,780 103,630 344,000 STATEMENT SHOWING ACTIVITY RATE OF ACTIVITY POOL Activity Total Expected Activity ACTIVITY COST POOL Measures Overheads Activity Rate Cleaning Ssq. Feet 140,690 10,000 14.07 Travel to job Miles driven 41,900 358,500 0.12 Job support Number of jobs 57,780 2,100 27.51 Cost of Job Flying N ranch Cleaning (4 @14.07 per 100 sq. ft) 56.28 Travel to Job (53.00 miles @ 0.12) 6.36 Job Support(1 job @27.51) 27.51 Cost of Job Flying N ranch 90.15 CONTRIBUTION MARGIN INCOME STATEMENT: Sales revenue 89.8 Less: Cost Cleaning carpets 56.28 Travelto jobs 6.36 Job support 27.51 Net Customer margin/(Loss) -0.35

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