Gallatin Carpet Cleaning has always charged a flat fee per hundred square feet of carpet...
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Accounting
Gallatin Carpet Cleaning has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $ per hundred square feet. However, there is some question about whether the company is making a profit on jobs requiring considerable ravel time. The owner's daughter suggested answering this question by designing an activitybased costing system using the information shown below:
Activity Cost Pool
Cleaning carpets
Travel to jobs
Job support
other organizationsustaining costs and idle capacity costs
Activity Measure
Square feet cleaned s
Miles driven
Number of jobs
None
Activity for the Year
hundred square feet
miles
jobs
Not applicable
The total cost of operating the company for the year is $ which includes the following costs:
tableWages$
Answer & Explanation
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