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

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Accounting

Gallatin Carpet Cleaning has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $12.95 per hundred square feet. However, there is some question about whether the company is making a profit on jobs requiring considerable ravel 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
414,000 miles
2,600 jobs
Not applicable
The total cost of operating the company for the year is $364,000 which includes the following costs:
\table[[Wages,$145,000
image

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