Kenosha Winter Services is a small family-owned snow-removal business.

Kenosha Winter Services is a small family-owned snow-removal business. For its services, the company has always charged a flat fee per hundred square metres of snow removal. The current fee is $11.55 per hundred square metres. However, there is some question about whether the company is actually making any money on jobs for some customers-particularly those located on more remote properties that require considerable travel time. The owner's daughter, home from school for the summer, has suggested investigating this question using ABC. After some discussion, a simple system consisting of four activity cost pools seemed to be adequate. The activity cost pools and their activity measures appear below Activity Cost Pool Snow re Travel to jobs Job support Other (costs of idle capacity and Activity Measure Activity for the Year Square metres cleaned (00s) Kilometres driven Number of jobs 40,120 hundred square metres 20,000 kilometres 250 jobs organization-sustaining costs) None NA The total cost of operating the company for the year is $450,000, which includes the following costs Wages Supplies Snow removal equipment depreciation Vehicle expenses Office expenses President's compensation $174,000 44,000 24,000 44,000 68,000 96,000 Total cost $450,000