Problem 7-19 Evaluating the Profitability of Services [LOZ, LO3, LO4J 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 $10.30 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 removal Travel to jobs Job support Other (costs of idle capacity and organization- sustaining costs) Wages Supplies Snow removal equipment depreciation Vehicle expenses office expenses President's compensation Total cost The total cost of operating the company for the year is $502,500, which includes the following costs: Wages Supplies Snow removal equipment depreciation Vehicle expenses Office expenses President's compensation Resource consumption is distributed across the activities as follows: Wages Supplies Snow removal equipment depr. Vehicle expenses Office expenses President's compensation Total cost $195,000 47,500 27,500 47,500 75,000 110,000 $502,500 Activity Cost Pool Activity Measure Square metres cleaned (00s) Kilometres driven Number of jobs Snow removal Travel to jobs Job support None Snow Removal Activity Cost Pool ABC Cost Snow removal Travel to jobs Job support Total Snow Removal 70% 100% 80% 08 + 08 08 Travel to Jobs Distribution of Resource Consumption across Activity Cost Pools Travel to Jobs 20% 08 08 70% 08 08 Job Support Job Support Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on. Required: 1. Prepare the first-stage allocation of costs to the activity cost pools. (Do not leave any empty spaces; input a O wherever it is required.) 08 08 08 Other Activity for the Year 51,500 hundred square metres 28,900 kilometres 240 jobs 08 40% 45% Activity Rate per hundred square metres per kilometre per job Other 10% 08 20% 30% 60% 55% NA Total 2. Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.) Total 1008 1008 100% 100% 100% 100% 3. The company recently completed a 5,000-square-metre snow removal job at Hometown Hardware-a 90-kilometre round-trip journey from Kenosha's offices. Compute the cost of this job using the ABC system. (Round your answers to 2 decimal places.)