Bus 630 Week 3 Dq 2 Profitability

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Complete the following exercise and respond to at least two of your fellow students' postings. Gallatin Carpet Cleaning is a small, family-owned 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 $28 per hundred square feet. However, 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, 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 (00s)     |20,000 hundred               |
|                                                                      |                              |square feet                 |
|Travel to jobs                                                         |Miles driven                 |60,000 miles                 |
|Job support                                                           |Number of jobs               |2,000 jobs                   |
|Other (costs of idle capacity and organization-sustaining costs)       |None                         |Not applicable               |

The total cost of operating the company for the year is $430,000, which includes the following costs:

|Wages                                       | $  150,000           |...