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Evaluating the profitability of services

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Gallatin Carpet Cleaning
1. The first-stage allocation of costs to activity cost pools appears below:

Distribution of Resource Consumption Across Activity Cost Pools
Cleaning Carpets Travel to Jobs Job Sup-port 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%

Cleaning Carpets Travel
to Jobs Job
Support Other Total

Wages
$105,000 $30,000 $ 0 $ 15,000 $150,000
Cleaning supplies 40,000 0 0 0 40,000
Cleaning equipment depreciation 16,000 0 0 4,000 20,000
Vehicle expenses 0 48,000 0 32,000 80,000
Office ...

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