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Gore Range Carpet Cleaning: Evaluating the profitability

Gore Range Carpet Cleaning is a family- owned business in Eagle- Vail, Colorado. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $ 22.95 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customersâ?" particularly those located on more 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: please see attachment.

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Your tutorial is in Excel attached. Click in the cells to see the computations. All the "flags" are marked "correct."

Q5:

Lazy Bee Randy job is not profitable, likely due to the $46.80 in travel costs incurred by the job. These ...

Solution Summary

Your tutorial is in Excel attached. Click in the cells to see the computations. All the "flags" are marked "correct."

$2.19