Help Sev Chapter 7 Graded Problems a small family-owned business operating out o

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Help Sev Chapter 7 Graded Problems a small family-owned business operating out of Bozeman, Montana. For its services, the company has per hundred square feet of carpet cleaned. The current fee is $28 per hundred square feet. However, there Gallatin Carpet Cleaning is always charged a flat fee is some question about whether 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 cost pools. The activity cost pools and their activity measures appear below r the company is actually making any money on jobs for some customers-particularly those located on 6 Cleaning carpets Travel to jobs Square feet eleaned (00m) Miles driven Number of jobn 20,000 hundred square feet 60,000 miles 2,000 jobs Job support other (organization-sustaining costs and idle capacity costs) None Not applicable The total cost of operating the company for the year is $430,000 which includes the following costs: Cleaning supplies Cleaning equipment depreciation Vehicle expenses office expensers President's compenaation Total cost s 150,000 40,000 20,000 80,000 60,000 80,000 $ 430,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consunption Reross Activities Cleaning Travel Job Carpets to JobsSupport Other Total 04 0% 0% 100 108 0% 20% 70% 1004 80% 08 04 0* 20% Cleaning supplies Cleaning equipment depreciation Vehicle expenses office expenses President's compensation 100% 004 008 100% 100% go 60 45t 409 60%

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Particulars Cleaning carpets Travel to jobs job support others Totals Wages 105,000 30,000 0 15,000 150,000 Cleaning supplies 40,000 0 0 0 40,000 Cleaning equipment depreciation 16,000 0 0 4,000 20,000 Vehicle expenses 0 48,000 0 32,000 80,000 Office expenses 0 0 27,000 33,000 60,000 President's copensation 0 0 32,000 48,000 80,000 Total cost 161,000 78,000 59,000 132,000 430,000

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