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: Driver and guard wages Vehicle operating expense $ 720,000 280,000 120,000 ehicle depreciation Customer representative salaries 160,000 and expenses Office expenses Administrative expenses Total cost 30,000 320,000 $1,630,000 The distribution of resource consumption across the activity cost pools is as follows Pickup Customer other 5% 25% 25% Totals 100% 100 100% Travel Delivery Service Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and 35% 50% 70% 60% 10% 0% 0% 15% 08 08 0% 20% 5% 90% 30% 60% 10% 50% 35% 1008 100% 100% expenses Office expenses Administrative expenses Required: Complete the first stage allocations of costs to activity cost pools Pickup and Delivery Customer Travel Service Other Totals Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost 0 0 0 0 0

Explanation / Answer

First stage allocation :

Pickup and Customer Travel Delivery Service Other Totals Driver and guard wages 360000 252000 72000 36000 720000 Vehicle operating expense 196000 14000 0 70000 280000 Vehicle depreciation 72000 18000 0 30000 120000 Customer representative salaries and expenses 0 0 144000 16000 160000 Office expense 0 6000 9000 15000 30000 Administrative expenses 0 16000 192000 112000 320000 Total cost 628000 306000 417000 279000 1630000

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