Student Name: Teresa Burks Class: Problem 07-19 1.

DENNY ASBESTOS REMOVAL COMPANY First Stage Allocation Estimating and Job Setup $20,000 9,000 76,000 $105,000 Correct! Working on Nonroutine Jobs $70,000 180,000 32,000 12,000 57,000 148,000 $499,000 Correct!

Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance Total cost

Removing Asbestos $80,000 420,000 40,000 33,000 19,000 185,000 $777,000 Correct!

Other $30,000 8,000 6,000 38,000 37,000 $119,000 Correct!

Totals $200,000 600,000 80,000 60,000 190,000 370,000 $1,500,000 Correct!

2. DENNY ASBESTOS REMOVAL COMPANY Activity Rates for Activity Cost Pools Total Activity 500 200 25 Activity Rate $1,554 per thousand square feet $525 per job $19,960 per nonroutine job

Activity Cost Pool Removing Asbestos Estimating and job setup Working on nonroutine jobs

Total Cost $777,000 $105,000 $499,000

3. DENNY ASBESTOS REMOVAL COMPANY Total and Average Cost per Thousand Square Feet a. Routine job - square feet Removing asbestos Estimating and job set-up Nonroutine job Total cost of the job Cost per thousand square feet b. Routine job - square feet Removing asbestos Estimating and job set-up Nonroutine job Total cost of the job Average cost per thousand square feet c. Nonroutine job - square feet Removing asbestos Estimating and job set-up Nonroutine job Total cost of the job Average cost per thousand square feet 2,000 $3,108 525 $3,633 $1,816.50 Correct! 4,000 $6,216 525 $6,741 $1,685.25 Correct! 2,000 $3,108 525 19,960 $23,593 $11,796.50

Correct!

<--Correct! <--Correct! <--Correct!

Given Data P07-19: DENNY ASBESTOS REMOVAL COMPANY Activity Cost Pool: Removing asbestos Estimating and job setup (per job) Working on nonroutine jobs (per job) Other Costs for the year: Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance Total cost Activity Measure Thousands of square feet Number of jobs Number of nonroutine jobs N/A Total Activity 500 200 25

$200,000 600,000 80,000 60,000 190,000 370,000 $1,500,000

Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance

Distribution of Resource Consumption Across Activity Cost Poo Estimating Working on Removing and Job Nonroutine Asbestos Setup Jobs Other 40% 10% 35% 15% 70% 0% 30% 0% 50% 0% 40% 10% 55% 15% 20% 10% 10% 40% 30% 20% 50% 0% 40% 10%

OS REMOVAL COMPANY

ribution of Resource Consumption Across Activity Cost Pools

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

Student Name: Teresa Burks Class: Problem 07-20 1. 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 24,000 $45,000 Correct! Job Support $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 $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 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!

2. 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 jobs Job support 3.

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

<--Correct! <--Correct! <--Correct!

GORE RANGE CARPET CLEANING Job Cost - Lazy B Ranch Activity Rate $13.70 0.90 32.50 Total Cost $82.20 46.80 32.50 $161.50 Correct!

Activity Cost Pool Cleaning carpets Travel to job Job support Total

Activity 600 52 1

4. GORE RANGE CARPET CLEANING Product Margin Sales Costs: Cleaning carpets $137.70 $82.20

Travel to job Job support Product margin

$46.80 $32.50

161.50 $(23.80) Correct!

Given Data P07-20: GORE RANGE CARPET CLEANING Current carpet cleaning fee (per 100 sq. feet) $22.95

Activity Cost Pool: Cleaning carpets Travel to jobs Job support Other (costs of idle capacity and organization-sustaining costs) Total cost of operating the company for the year: Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost

Activity Measure Square feet cleaned (00s) Miles driven Number of jobs None

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

$140,000 25,000 10,000 30,000 60,000 75,000 $340,000 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%

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

Cleaning Carpets 75% 100% 70% 0% 0% 0%

Part 3 information: Size of job (square feet) Miles driven round trip Part 4 information: Revenue earned Charged per 100 square feet

600 52

$137.70 $22.95

E CARPET CLEANING

Activity for the Year hundred square feet

Distribution of Resource Consumption Across Activity Cost Pools Totals 100% 100% 100% 100% 100% 100%