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Gore Range Carpet Cleaning is a family-owned business in Eagle-Vail, Colorado. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $22.60 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 more remote ranches that require considerable travel time. The owners daughter, home for the summer from college, has suggested investigating this question using activity-based costing. 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	Activity Measure	Activity for the Year
Cleaning carpets	Square feet cleaned (000s)	11,000	hundred square feet
Travel to jobs	Miles driven	85,500	miles
Job support	Number of jobs	1,700	jobs
Other (organization-sustaining and idle capacity costs)	None	Not applicable

The total cost of operating the company for the year is $352,000, which includes the following costs:

Wages	$	145,000
Cleaning supplies		21,000
Cleaning equipment depreciation		16,000
Vehicle expenses		32,000
Office expenses		67,000
Presidents compensation		71,000
Total cost	$	352,000

Resource consumption is distributed across the activities as follows:

Distribution of Resource Consumption Across Activities

	Cleaning Carpets		Travel to Jobs		Job Support		Other		Total
Wages	79	%	13	%	0	%	8	%	100	%
Cleaning supplies	100	%	0	%	0	%	0	%	100	%
Cleaning equipment depreciation	74	%	0	%	0	%	26	%	100	%
Vehicle expenses	0	%	76	%	0	%	24	%	100	%
Office expenses	0	%	0	%	61	%	39	%	100	%
Presidents compensation	0	%	0	%	29	%	71	%	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. (Round your answers to 2 decimal places.)

3.	The company recently completed a 2 hundred square-foot carpet-cleaning job at the Lazy Bee Rancha 57.00-mile round-trip from the companys offices in Eagle-Vail. Compute the cost of this job using the activity-based costing system. (Round your intermediate and final answers to 2 decimal places.)

4.	The revenue from the Lazy Bee Ranch was $45.20 (2 hundred square-feet at $22.60 per hundred square feet). Prepare a report showing the margin from this job. (Negative customer margins should be indicated by a minus sign. Round your intermediate calculations and final answers to 2 decimal places.)

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