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 $22.35 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 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 $134.10 (600 square feet @ $22.35 per hundred square feet). Calculate the customer margin earned on this job.

1. A producer in Philadelphia uses zone pricing. The producer is selling widgets for $150/ton in the Eastern Zone, which includes Richmond and Baltimore. The actual freight cost from its plant to Baltimore is $70/ton and from its plant to Richmond is $80/ton. In this situation,

Multiple Choice

• one ton of widgets costs a Baltimore buyer the same as a Richmond buyer.

• both buyers would pay $300 for one ton of widgets.

• one ton of widgets delivered to Richmond would cost the buyer $230.

• one ton of widgets delivered to Baltimore would cost the buyer $220.

• None of these answers is correct.

2. A main purpose of unfair trade practice legislation is to

Multiple Choice

• prevent manufacturers from taking high markups.

• eliminate price competition on manufacturers' brands.

• require some minimum percentage markup on cost.

• permit different types of retail outlets to charge different retail prices.

• guarantee retailers some profit.

3. When looking for an Uber car during rush hour, a customer notices that the same ride that she took earlier in the afternoon is three times more expensive. What explains this?

Multiple Choice

• Uber's surge pricing model adjusts prices to better match supply and demand for its services.

• Uber uses predictive analytics to run real-time pricing experiments.

• Uber uses a pricing model that is based on a customer's ability or desire to pay for its services.

• Uber has a one-price policy, but rides in the afternoon and rides in the evening are not considered to be under the "same conditions."

• Uber needs to pay its drivers more in the evening due to overtime laws.

4. A discount of 2/10, net 30 means the buyer can take a 2 percent discount off the face value of the invoice if the invoice is paid within 10 days.

True or False

5. American Airlines maintains a frequent flier loyalty program that allows members to accumulate 25,000 miles and then redeem these miles for a free round-trip ticket. This is a(n)

Multiple Choice

• introductory price deal.

• F.O.B. discount.

• cash discount.

• cumulative quantity discount.

• bundle price discount.

6. A large producer who offers no discounts and the same prices to all customers in the United States

Multiple Choice

• does not have pricing objectives.

• ignores the benefits of administered pricing.

• probably ignores nonprice competition too.

• may be "playing it safe" because of concern about the Robinson-Patman Act.

• is probably violating the antidumping laws.

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 $23.35 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 $348,000 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 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 $93.40 (400 square feet @ $23.35 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 $23.10 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 $359,000 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 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 $46.20 (200 square feet @ $23.10 per hundred square feet). Calculate the customer margin earned on this job.

(7-20)

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 $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 800 square foot carpet-cleaning job at the Flying N Ranch—a 55-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 $185.20 (800 square feet @ $23.15 per hundred square feet). Calculate the customer margin earned on this job.

Use the CardioGoodFitness data.

The company sells three different lines of treadmills. The TM195 is an entry-level treadmill designed for those who want minimal programs and the desire for simplicity to initiate their walk or hike.

The TM498 is a middle-line model for those who are in a transitional stage from walkers to running or midlevel runners. It has two programs and a 15% elevation upgrade from the TM195.

The TM798 is the top-of-the-line treadmill which is structurally larger and heavier and has more features than the other models. It is designed for those who are power walkers or runner.

• Go to the data sets in textbook. Use Cardio Good Fitness. • Click on STAT.
• T Stats → One Sample → With Data
• Select the appropriate column variable

• Select Product under Group by
• Under Perform, select Confidence interval for μ and set the level at 0.95. • Click Compute!
• The confidence interval is given by the L. Limit and U. Limit.

For marketing purposes, we want to estimate the mean age, income, and mileage for each model treadmill.

Calculate the 95% confidence interval for each variable grouped by the Treadmill model. Copy your results below.

Group by: Product
μ : Mean of Age

95% confidence interval results:

Group by: Product
μ : Mean of Income

95% confidence interval results:

Group by: Product
μ : Mean of Miles

95% confidence interval results:

Use these results to answer the following questions:

1. The TM195 sells for $1500, the TM498 sells for $1750, and the TM798 sells for $2500. Based off your results, are these prices reasonable? Explain.

2. Do we need to market the different models to different age groups? Explain.

3. Does there seem to be any differences in the amount of average miles for each model of treadmill? Explain.

1) In a recent poll, the Gallup organization found that 45% of adult Americans believe that the overall state of moral values in the United States is poor. Suppose a survey of a random sample of 25 adult Americans is conducted in which they are asked to disclose their feelings on the overall state of moral values in the United States. Answer the questions below, showing work. Bare answers are not acceptable. (Showing work means writing the calculator command you used with correct input values in the correct order.)

a) Explain why this is a binomial experiment.

b) Find and interpret the probability that exactly 15 of those surveyed felt the overall state of moral values in the United States is poor.

c) Find and interpret the probability that no more than 10 of those surveyed felt the overall state of moral values in the United States is poor.

d) Find and interpret the probability that more than 16 of those surveyed felt the overall state of moral values in the United States is poor.

e) Find and interpret the probability that 13 or 14 of those surveyed felt the overall state of moral values in the United States is poor.

f) Would it be unusual to find 20 or more adult Americans who believe the overall state of moral values in the United States is poor? Why or why not?

g) Now based on a random sample of 500 adult Americans, compute the mean and standard deviation of the random variable X, the number of adults who believe the overall state of moral values in the United States is poor. Interpret the mean.

h) Would it be unusual to identify 240 adult Americans who believe the overall state of moral values in the United States is poor, based on a random sample of 500 adult Americans? Why? Now using the Normal Approximation to the Binomial, approximate the probability that:

i) Exactly 250 of those surveyed feel the overall state of moral values in the United States is poor.

j) Between 220 and 250, inclusive, of those surveyed feel the overall state of moral values in the United States is poor.

k) At least 260 adult Americans who believe the overall state of moral values in the United States is poor, based on a random sample of 500 adult Americans. Would this be unusual? Why?

2 ) According to www.meretrix.com traffic fatalities occur at a rate of 1.32 fatal accidents per 100 million miles. Find the probability that, during the next 100 million miles, there will be

a) exactly zero accidents. Interpret the results.

b) at least one fatal accident. Interpret the results.

C) more than one fatal accident. Interpret the results.

Boyne University offers an extensive continuing education program in many cities throughout the state. For the convenience of its faculty and administrative staff and to save costs, the university operates a motor pool. The motor pool’s monthly planning budget is based on operating 20 vehicles; however, for the month of March the university purchased one additional vehicle. The motor pool furnishes gasoline, oil, and other supplies for its automobiles. A mechanic does routine maintenance and minor repairs. Major repairs are performed at a nearby commercial garage.

The following cost control report shows actual operating costs for March of the current year compared to the planning budget for March.

The planning budget was based on the following assumptions:

$0.27 per mile for gasoline.

$0.16 per mile for oil, minor repairs, and parts.

$51 per automobile per month for outside repairs.

$86 per automobile per month for insurance.

$8,610 per month for salaries and benefits.

$211 per automobile per month for depreciation.

The supervisor of the motor pool is unhappy with the report, claiming it paints an unfair picture of the motor pool’s performance.

Required:

1. Complete the performance report for March based on a flexible budget that shows spending variances. (Round "per mile" answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Please help with Planning Budget Assumptions, thank you.  

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 $22.60 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 $347,000 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 800 square foot carpet-cleaning job at the Flying N Ranch—a 58-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 $180.80 (800 square feet @ $22.60 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 $22.35 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) 11,000 hundred square feet Travel to jobs Miles driven 133,500 miles Job support Number of jobs 1,800 jobs Other (organization-sustaining costs and idle capacity costs) None Not applicable The total cost of operating the company for the year is $341,000 which includes the following costs: Wages $ 136,000 Cleaning supplies 25,000 Cleaning equipment depreciation 6,000 Vehicle expenses 34,000 Office expenses 65,000 President’s compensation 75,000 Total cost $ 341,000 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 78 % 14 % 0 % 8 % 100 % Cleaning supplies 100 % 0 % 0 % 0 % 100 % Cleaning equipment depreciation 75 % 0 % 0 % 25 % 100 % Vehicle expenses 0 % 77 % 0 % 23 % 100 % Office expenses 0 % 0 % 56 % 44 % 100 % President’s compensation 0 % 0 % 26 % 74 % 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 800 square foot carpet-cleaning job at the Flying N Ranch—a 56-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 $178.80 (800 square feet @ $22.35 per hundred square feet). Calculate the customer margin earned on this job.