"Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a...

"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 milesob 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 Cleaning supplies 40,000 Cleaning equipment depreciation 20,000 Vehicle expenses 80,000 Office expenses 60,000 President's compensation 80,000 $ 430,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Travel toob Carpetsobs Support Other Total Wages 70% 20% 0% 10% 100% Cleaning supplies 100% 0% 0% 0% 100% Cleaning equipment depreciation 80% 0% 0% 20% 100% Vehicle expenses 0% 60% 0% 40% 100% Office expenses 0% 0% 45% 55% 100% President's compensation 0% 0% 40% 60% 100%ob support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on. Using Exhibit 7-6 as a guide, prepare the first-stage allocation of costs to the activity cost pools.