The document outlines an investigation into the profitability of a company's cleaning services, especially for remote ranches that require significant travel time. The owner's daughter designed an activity-based costing system using four activity cost pools.**Activity Cost Pool and Measures:**- **Cleaning Carpets:** Measured in square feet cleaned (100s), totaling 13,500 hundred square feet for the year.- **Travel to Jobs:** Measured in miles driven, with a total of 65,000 miles for the year.- **Job Support:** Measured by the number of jobs, totaling 1,900 jobs for the year.- **Other Costs:** Includes organization-sustaining costs and idle capacity, not applicable to specific activities.**Total Cost of Operating the Company (Yearly): $369,000**- Wages: $148,000- Cleaning Supplies: $31,000- Cleaning Equipment Depreciation: $17,000- Vehicle Expenses: $30,000- Office Expenses: $67,000- President’s Compensation: $76,000**Resource Consumption Across Activities:**- Wages: Distributed as 7% Cleaning Carpets, 14% Travel, 0% Job Support, 8% Other.- Cleaning Supplies: 100% allocated to Cleaning Carpets.- Equipment Depreciation: 68% Cleaning Carpets, 0% Travel, 32% Other.- Vehicle Expenses: 0% Cleaning Carpets, 0% Travel, 100% Other.- Office Expenses: 0% Cleaning Carpets, 59% Travel, 41% Other.- President’s Compensation: 0% Cleaning Carpets, 33% Travel, 67% Other.**Job Support:** Involves handling customer calls, scheduling, billing, and resolving issues.**Tasks Required:**1. Allocate costs to activity cost pools.2. Compute activity rates for each cost pool.3. Assess the cost of a specific 600 square foot carpet-cleaning job at Flying N Ranch, 56 miles from the company’s office in Bozeman.4. The revenue from Flying N Ranch was $133.20. Calculate the customer margin.This system helps determine if the company profits from its jobs and assists in resource allocation for efficiency.

Name: The document outlines an investigation into the profitability of a co
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Description: The document outlines an investigation into the profitability of a company's cleaning services, especially for remote ranches that require significant travel time. The owner's daughter designed an activity-based costing system using four activity co

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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: Activity Cost Pool Cleaning carpets Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost Travel to jobs Job support Other (organization-sustaining costs and idle capacity costs) Not applicable The total cost of operating the company for the year is $369,000 which includes the following costs: Activity Measure Square feet cleaned (00s) Miles driven Number of jobs Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses office expenses President's compensation None Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities $ 148,000 31,000 17,000 30,000 67,000 76.000 $369,000 Cleaning Travel to Carpets 78% 100% 68% 0% 0% 0% Jobs Job Support 14% 0% 0% 79% 0% 0% ક૭ ૭ ૨ 0% 59% 33% Other 8% 0% Activity for the Year 13,500 hundred square feet 65,000 miles 1,900 jobs 32% 21% 41% 67% Total 100% 100% 100% 100% 100% 100% 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. 2. Compute the activity rates for the activity cost pools. 3. The company recently completed a 600 square foot carpet-cleaning job at the Flying N Ranch-a 56-mile round-trip journey from the company's offices in Bozeman. Compute the cost of this job using the activity-based costing system. 4. The revenue from the Flying N Ranch was $133.20 (600 square feet @ $22.20 per hundred square feet). Calculate the customer margin earned on this job.