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 $23.50 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, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

The total cost of operating the company for the year is $352,000 which includes the following costs:

Resource consumption is distributed across the activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 200 square foot carpet-cleaning job at the Flying N ranch—a 53-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N ranch was $47.00 (200 square feet @ $23.50 per hundred square feet). Calculate the customer margin earned on this job.

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 $22.70 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, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

The total cost of operating the company for the year is $345,000 which includes the following costs:

Resource consumption is distributed across the activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 200 square foot carpet-cleaning job at the Flying N Ranch—a 57-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N Ranch was $45.40 (200 square feet @ $22.70 per hundred square feet). Calculate the customer margin earned on this job.

Parker Piano Company purchases a tract of land and an existing building for $1,000,000. The company plans to remove the old building and construct a new restaurant on the site. In addition to the purchase price, Parker pays closing costs, including title insurance of $3,000. The company also pays $14,000 in property taxes, which includes $9,000 of back taxes (unpaid taxes from previous years) paid by Parker on behalf of the seller and $5,000 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $50,000 to tear down the old building and remove it from the site. Parker is able to sell salvaged materials from the old building for $5,000 and pays an additional $11,000 to level the land.

Determine the cost of the land.

Cost of land:

Purchase cost                                          $1,000,000

Add: Closing costs                                  3,000

Add: Back taxes                                       9,000

Add: Cost of tearing the building             50,000

Add: Cost of leveling the land                 11,000

Less: Salvage value of materials              5,000

Total cost of land                                    $1,068,000

Depreciation and Disposal

The Parker Piano Company purchased a Delivery Truck on January 1, 2025 for $50,000 which included all costs to get the asset ready for use. The truck has an anticipated life of 100,000 miles or 4 years. The estimated residual value at the end of the assets service life is expected to be $2,000. For assets of this type, the company utilizes the straight-line depreciation method.

1. Record the purchase of the asset.

B. Complete the depreciation table below.

(QUESTIONS A and B have been completed please complete C-D)

3. Record the entry for December 31, 2025 to record the depreciation for the year.

D. Suppose the company sells the van on December 31, 2027 for $18,000 cash. Provide the journal entry to record the sale.

E. Assume the company chooses to use the units-of-production method. Based on the information below, complete the depreciation schedule.

allatin 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 $22.60 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, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

The total cost of operating the company for the year is $366,000 which includes the following costs:

Resource consumption is distributed across the activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 600 square foot carpet-cleaning job at the Flying N Ranch—a 59-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N Ranch was $135.60 (600 square feet @ $22.60 per hundred square feet). Calculate the customer margin earned on this job.

Your landlord has read up on the benefits of electric heat pumps, and has decided to replace your ancient 45,000 BTU/hr gas furnace with a 1500W electric heat pump space heater (which has both space heating and cooling capacity) in your Berkeley house.

1. a) Given the following information, what is the net present value of replacing the appliance? Will the cost of the initial investment be recovered?

   • The heat pump appliance costs $1,200.

   • Installation costs are $3,000.

   • The heat pump can be expected to last 15 years with an average of $115/year of

     maintenance costs. Its resale value in 15 years will be -$300; you will have to hire

     a contractor to dispose of the heat pump safely.

   • Continued operation of the furnace would have cost an average of $350/year in

     maintenance for the next 15 years.

   • The resale value of the furnace is -$300; you will have to hire a contractor to

     dispose of the furnace safely.

   • In the winter months (Nov-Feb) your house will use the heat pump for 6 hours per

     day; In all other months, your house will use the heat pump for an average of 1.5

     hours per day.

   • In the winter months (Nov-Feb) your house used your gas furnace for 14 hours

     per day; In all other months, your house never used the furnace.

   • The cost of gas is $1.15/therm and the cost of electricity is $0.13/kWh.

   • The inflation rate is 1.5%.

b) Assuming that you plan to live in your house forever, and pay your ​utility bills,​ but your landlord pays for the appliances, installation, and maintenance, what fraction of the net present value is captured by you and your housemates through utility bill savings?

In 2019, you bought a hybrid car to replace your old gas guzzler. Your hybrid (used) cost you $13,000, and gets 48 mpg city/45 mpg highway. Your old car’s mileage was 25 mpg city/30 mpg highway. Gas costs $3.15/gallon, and you drive 12,000 miles per year. You sold your car for $1,900. You typically drive 74 percent of your miles on the highway and 26 percent in the city.

c) Use the simple payback equation to calculate the number of years it will take to recover the cost of your investment.

d) Now assume that California levies a carbon tax. Carbon dioxide emissions are priced at $50/ton, and paid at annual inspections. Every gallon of gas burned creates 8,887 grams of CO2. What is the new payback period for the new car?

what kind of new information do you need?

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 $23.15 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, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

The total cost of operating the company for the year is $346,000 which includes the following costs:

Resource consumption is distributed across the activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 600 square foot carpet-cleaning job at the Flying N Ranch—a 51-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N Ranch was $138.90 (600 square feet @ $23.15 per hundred square feet). Calculate the customer margin earned on this job.

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 $22.90 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, she designed a simple system consisting of four activity cost pools. 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) 14,000 hundred square feet Travel to jobs Miles driven 92,500 miles Job support Number of jobs 1,700 jobs Other (organization-sustaining costs and idle capacity costs) None Not applicable The total cost of operating the company for the year is $361,000 which includes the following costs: Wages $ 145,000 Cleaning supplies 27,000 Cleaning equipment depreciation 16,000 Vehicle expenses 34,000 Office expenses 60,000 President’s compensation 79,000 Total cost $ 361,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Carpets Travel to Jobs Job Support Other Total Wages 79 % 11 % 0 % 10 % 100 % Cleaning supplies 100 % 0 % 0 % 0 % 100 % Cleaning equipment depreciation 69 % 0 % 0 % 31 % 100 % Vehicle expenses 0 % 80 % 0 % 20 % 100 % Office expenses 0 % 0 % 64 % 36 % 100 % President’s compensation 0 % 0 % 28 % 72 % 100 % Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on. Required: 1. Prepare the first-stage allocation of costs to the activity cost pools. 2. Compute the activity rates for the activity cost pools. 3. The company recently completed a 200 square foot carpet-cleaning job at the Flying N Ranch—a 50-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system. 4. The revenue from the Flying N Ranch was $45.80 (200 square feet @ $22.90 per hundred square feet). Calculate the customer margin earned on this job.

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 $22.20 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, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

The total cost of operating the company for the year is $352,000 which includes the following costs:

Resource consumption is distributed across the activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 400 square foot carpet-cleaning job at the Flying N Ranch—a 59-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N Ranch was $88.80 (400 square feet @ $22.20 per hundred square feet). Calculate the customer margin earned on this job.

East Coast Railroad Company transports commodities among three routes (city-pairs): Atlanta/Baltimore, Baltimore/Pittsburgh, and Pittsburgh/Atlanta. Significant costs, their cost behavior, and activity rates for April are as follows:

Operating statistics from the management information system reveal the following for April:

Instructions

1. Prepare a contribution margin by route report for East Coast Railroad Company for the month of April. Compute the contribution margin ratio in whole percents, rounded to one decimal place.

2. Discuss the route performance of the railroad using the above report.

Note: add citations when necessary.

East Coast Railroad Company transports commodities among three routes (city-pairs): Atlanta/Baltimore, Baltimore/Pittsburgh, and Pittsburgh/Atlanta. Significant costs, their cost behavior, and activity rates for April are as follows:

Operating statistics from the management information system reveal the following for April:

Instructions

1. Prepare a contribution margin by route report for East Coast Railroad Company for the month of April. Compute the contribution margin ratio in whole percents, rounded to one decimal place.

2. Discuss the route performance of the railroad using the above report.

Shelly Beaman (social security number 412-34-5670) is single and resides at 540 Front Street, Ashland, NC 27898. Shelly’s W-2 wages $ 55,800 Federal withholding 10,044 Social security wages 55,800 Social security withholding 3,460 Medicare withholding 809 State withholding 3,348 1099-INT New Bank 532 1099-DIV XYZ, Inc. Ordinary dividends 258 Qualified dividends 258 Shelly had the following itemized deductions: State income tax withholding (from W-2) $ 3,348 State income tax paid with 2015 return 600 Real estate tax 4,200 Mortgage interest 11,800 Charitable contributions 2,500 Shelly also started her own home design consulting business in March 2016 (Business code, 238990, Cash basis). The results of her business operations for 2016 follow: Gross receipts from clients $ 154,000 Vehicle mileage 21,000 business miles (2,100 per month) 32,000 total miles during the year 2009 Chevy Suburban Placed in service 03/01/16 Postage (750 ) Office supplies (1,500 ) State license fees (155 ) Supplies (5,300 ) Professional fees (2,500 ) Design software (1,000 ) Professional education programs (registration) (550 ) Travel to education program Airplane (350 ) Lodging $119/night × 3 nights Meals per diem $46 per day x 3 days Business Assets Date Purchased Cost Laptop 6/08/16 $ 2,500 Computer 3/05/16 5,700 Printer 3/01/16 1,800 Copier 6/02/16 1,700 Furniture 4/01/16 5,000 Building 3/01/16 175,000 Phone (600 ) Internet service (450 ) Rent (8,300 ) Insurance (1,700 ) Shelly made a $27,000 estimated tax payment on September 15, 2016. Prepare Shelly’s Form 1040 for 2016 including all of the supplementary schedules. Schedule A, Schedule B, Schedule C, Form 4562, and Schedule SE are required. Section 179 is elected on all eligible assets in 2016. She wants to contribute to the presidential election campaign and does not want anyone to be a third-party designee. Shelly had qualifying health care coverage at all times during the tax year. For any missing information, make reasonable assumptions. (List the names of the taxpayers and any income they receive in the order in which they appear in the problem. Input all the values as positive numbers unless otherwise stated in the forms. Round your intermediate computations to nearest whole dollar value.)