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Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its...

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Accounting

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.70 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers-particularly those located on 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 consisting of four activity cost pools. The activity cost pools and their activity measures appear below:
\table[[Activity Cost Pool,Activity Measure,Activity for the Year],[Cleaning carpets,Square feet cleaned (00s),12,000 hundred square feet],[Travel to jobs,Miles driven,178,500 miles],[Job support,Number of jobs,1,800 jobs],[Other (organization-sustaining costs and,,Not applicable]]
The total cost of operating the company for the year is $362,000 which includes the following costs:
\table[[Wages,$149,000
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