EXERCISE 8-21 (CONTINUED)

3. The cost for the Flying N Ranch job is computed as follows:

Cleaning

Carpets Travel to

Jobs Job Sup-

port Total

Activity for the Flying N job... 5 hundred

square feet 75 miles

driven 1 job

Wages... $26.25 $37.50 $63.75

Cleaning supplies ... 10.00 10.00

Cleaning equipment depreciation... 4.00 4.00

Vehicle expenses... 60.00 60.00

Office expenses ... $13.50 13.50

President’s compensation... 0.00 0.00 16.00 16.00

Total cost ... $40.25 $97.50 $29.50 $167.25

Example: $5.25 per hundred square feet × 5 hundred square feet = $26.25

Activity rate for wages and cleaning carpets.

Problem 8-25 (continued)