Problem $7-20($Algo$)$ Evaluating the Profitability of Services $[$LO$7-2,$ LO$7-3,$ LO$7-4,$ LO$7-5]$

Gallatin Carpet Cleaning has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $$13\mathrm{.}50$ 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:

The total cost of operating the company for the year is $$358,000$ which includes the following costs:

She distributed these operating costs across her four activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so

on$.$

Required:

Prepare the first$-$stage allocation of costs to the activity cost pools.

Compute the activity rates for the activity cost pools.

The company recently completed a $400-$square$-$foot carpet$-$cleaning job at the Flying $N$ Ranch$-$a $52-$mile round$-$trip from the

company's home office. Compute the cost of this job using the activity$-$based costing system.

The revenue from the Flying $N$ Ranch was $$54\mathrm{.}00(400$ square feet @$$13\mathrm{.}50$ per hundred square feet$).$ Calculate the customer

margin earned on this job.

Complete this question by entering your answers in the tabs below.

Prepare the first$-$stage allocation of costs to the activity cost pools.