SecuriCorp operates a fleet of armored cars that make scheduled pickups and deli

Question

SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los Angeles area. The company is implementing an activity-based costing system that has four activity cost pools: Travel, Pickup and Delivery, Customer Service, and Other. The activity measures are miles for the Travel cost pool, number of pickups and deliveries for the Pickup and Delivery cost pool, and number of customers for the Customer Service cost pool. The Other cost pool has no activity measure because it is an organization-sustaining activity. The following costs will be assigned using the activity-based costing system:

The distribution of resource consumption across the activity cost pools is as follows:

Required:

Complete the first stage allocations of costs to activity cost pools.

Driver and guard wages $ 1,180,000 Vehicle operating expense 610,000 Vehicle depreciation 490,000 Customer representative salaries and expenses 520,000 Office expenses 380,000 Administrative expenses 680,000 Total cost $ 3,860,000 Required: Complete the first stage allocations of costs to activity cost pools Pickup and Delivery Customer Travel Service Other Totals Drive Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost r and guard wages

Explanation / Answer

Travel Pickup and Delivery Customer Service Other Total Driver and guard wages 590000 413000 118000 59000 1180000 Vehicle operating expense 427000 30500 0 152500 610000 Vehicle depreciation 294000 73500 0 122500 490000 Customer representative salaries and expenses 0 0 468000 52000 520000 Office expenses 0 76000 114000 190000 380000 Administrative expenses 0 34000 408000 238000 680000 Total 1311000 627000 1108000 814000 3860000 The costs for each activity cost pools have been multiplied by respective percentages

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