S Gallatin Carpet Cleaning has always charged a flat fee per hundred square feet of carpet...

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S Gallatin Carpet Cleaning has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $13.80 per hundred square feet. However, there is some question about whether the company is making a profit on jobs requiring considerable travel time. The owner's daughter suggested answering this question by designing an activity-based costing system using the information shown 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 Number of jobs None Activity for the Year 8,500 hundred square feet 231,500 miles 2,600 jobs Not applicable The total cost of operating the company for the year is $346,000 which includes the following costs: Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost $ 135,000 23,000 16,000 33,000 66,000 73,000 $ 346,000 She distributed these operating costs across her four activities as follows: Distribution of Resource Consumption Across Activities Cleaning Travel to Carpets Jobs Job Support Other Total 72% 14% 0% 14% 100% Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation 100% 0% 0% 0% 100% 63% 0% 0% 37% 100% 0% 80% 0% 20% 100% 0% 0% 56% 44% 100% 0% 0% 28% 72% 100% Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on. S Gallatin Carpet Cleaning has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $13.80 per hundred square feet. However, there is some question about whether the company is making a profit on jobs requiring considerable travel time. The owner's daughter suggested answering this question by designing an activity-based costing system using the information shown 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 Number of jobs None Activity for the Year 8,500 hundred square feet 231,500 miles 2,600 jobs Not applicable The total cost of operating the company for the year is $346,000 which includes the following costs: Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost $ 135,000 23,000 16,000 33,000 66,000 73,000 $ 346,000 She distributed these operating costs across her four activities as follows: Distribution of Resource Consumption Across Activities Cleaning Travel to Carpets Jobs Job Support Other Total 72% 14% 0% 14% 100% Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation 100% 0% 0% 0% 100% 63% 0% 0% 37% 100% 0% 80% 0% 20% 100% 0% 0% 56% 44% 100% 0% 0% 28% 72% 100% Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

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To determine the cost per hundred square feet of carpet cleaned and to assess whether the company is ... View the full answer