Gallatin CarpetCleaning is a small, family-owned business operating out ofBozeman, Montana. For its services, the company has always chargeda flat fee per hundred square feet of carpet cleaned. The currentfee is $22.95 per hundred square feet. However, there is somequestion about whether the company is actually making any money onjobs for some customers—particularly those located on remoteranches that require considerable travel time. The owner’sdaughter, home for the summer from college, has suggestedinvestigating this question using activity-based costing. Aftersome discussion, she designed a simple system consisting of fouractivity cost pools. The activity cost pools and their activitymeasures appear below:

Activity CostPool	ActivityMeasure	Activity for theYear
Cleaningcarpets	Square feetcleaned (00s)	6,000	hundred square feet
Travel tojobs	Milesdriven	439,500	miles
Job support	Number ofjobs	1,600	jobs
Other(organization-sustaining costs and idle capacity costs)	None	Notapplicable

The total cost ofoperating the company for the year is $357,000 which includes thefollowing costs:

Wages	$	139,000
Cleaningsupplies		28,000
Cleaningequipment depreciation		17,000
Vehicleexpenses		31,000
Officeexpenses		64,000
President’scompensation		78,000
Total cost	$	357,000

Resource consumptionis distributed across the activities as follows:

Distribution of Resource Consumption Across Activities
	Cleaning Carpets		Travel to Jobs		Job Support		Other		Total
Wages	73	%	10	%	0	%	17	%	100	%
Cleaningsupplies	100	%	0	%	0	%	0	%	100	%
Cleaningequipment depreciation	72	%	0	%	0	%	28	%	100	%
Vehicleexpenses	0	%	83	%	0	%	17	%	100	%
Officeexpenses	0	%	0	%	59	%	41	%	100	%
President’scompensation	0	%	0	%	30	%	70	%	100	%

Job support consistsof receiving calls from potential customers at the home office,scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare thefirst-stage allocation of costs to the activity cost pools.

2. Compute theactivity rates for the activity cost pools.

3. The companyrecently completed a 200 square foot carpet-cleaning job at theFlying N Ranch—a 52-mile round-trip journey from the company’soffices in Bozeman. Compute the cost of this job using theactivity-based costing system.

4. The revenue fromthe Flying N Ranch was $45.90 (200 square feet @ $22.95 per hundredsquare feet). Calculate the customer margin earned on this job.

PLEASE HELP!!