Student Name: Marcie DeGiovine Class: BA511 6/1 - 9/30/2013 Problem 08-22 GORE RANGE CARPET CLEANING Distribution

of Resource Consumption Across Activity Cost Pools Travel to Job Jobs Support Other 15% 0% 10% 0% 0% 0% 0% 0% 30% 80% 0% 20% 0% 60% 40% 0% 30% 70% Travel to Jobs 21,000 0 0 24,000 0 0 $45,000 Correct! Job Support 0 0 0 0 36,000 22,500 $58,500 Correct!

Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation

Cleaning Carpets 75% 100% 70% 0% 0% 0% Cleaning Carpets 105,000 25,000 7,000 0 0 0 $137,000 Correct!

Totals 100% 100% 100% 100% 100% 100%

Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost

Other 14,000 0 3,000 6,000 24,000 52,500 $99,500 Correct!

Totals $140,000 25,000 10,000 30,000 60,000 75,000 $340,000 Correct!

GORE RANGE CARPET CLEANING Activity Rates for Activity Cost Pools Total Activity 10,000 50,000 1,800 Activity Rate $13.70 per hundred square feet 0.90 per mile 32.50 per job

Activity Cost Pool Cleaning carpets Travel to job Job support

Total Cost $137,000 45,000 58,500

GORE RANGE CARPET CLEANING Job Cost - Lazy Bee Ranch Activity Rate $13.70 0.90 32.50 Total Cost $82.20 per hundred square feet 46.80 per mile 32.50 per job

Activity Cost Pool Cleaning carpets Travel to job Job support Total

Activity 6 52 1

GORE RANGE CARPET CLEANING Product Margin

Sales Costs: Cleaning carpets Travel to jobs Job support Product margin

$137.70 $82.20 $46.80 $32.50

161.50 ($23.80) Correct!

Given Data P08-22: GORE RANGE CARPET CLEANING Activity Measure Square feet cleaned (00s) Miles driven Number of jobs None

Activity Cost Pool: Cleaning carpets Travel to jobs Job support Other (costs of idle capacity and organization-sustaining costs)

Activity for the Year 10,000 hundred square feet 50,000 miles 1,800 jobs Not applicable

Total cost of operating the company for the year: Wages $140,000 Cleaning supplies 25,000 Cleaning equipment depreciation 10,000 Vehicle expenses 30,000 Office expenses 60,000 President's compensation 75,000 Total cost $340,000 Distribution of Resource Consumption Across Activity Cost Pools Cleaning Travel to Job Carpets Jobs Support Other 75% 15% 0% 10% 100% 0% 0% 0% 70% 0% 0% 30% 0% 80% 0% 20% 0% 0% 60% 40% 0% 0% 30% 70%

Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation

Totals 100% 100% 100% 100% 100% 100%

Part 3 information: Size of job (square feet) Miles driven round trip Part 4 information: Revenue earned Charged per square foot Check figure: (3) Total cost of serving the Lazy Bee Ranch

600 52

$137.70 22.95

$161.50