Gallatin Carpet Cleaning is a small, familyowned 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 $ per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customersparticularly 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 activitybased 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:
tableActivity Cost Pool,Activity Measure,Activity for the YearCleaning carpets,Square feet cleaned s hundred square feetTravel to jobs,Miles driven, milesJob support,Number of jobs, jobsOther organizationsustaining costs and,,Not applicable
The total cost of operating the company for the year is $ which includes the following costs:
tableWages$
