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 $1,100,000 Vehicle operating 530,000 expense Vehicle depreciation 410,000 Customer representative 440,000 salaries and expenses Office expenses 300,000 Administrative 600,000 expenses Total cost $3,380,000 The distribution of resource consumption across the activity cost pools is as follows: Pickup and Customer Travel Delivery Service Other Totals 50% 10% 5% 100% 70% 0% 25% 100% 60% 15% 0% 25% 100% 35% 5% Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses 0 % 0% 08 20% 90% 30% 60% 10% 50% 35% 100% 100% 100% Required: Complete the first stage allocations of costs to activity cost pools. Pickup Customer and Delivery Travel Service Other Totals Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost

Answer 1

	Travel	Pickup and Delivery	Customer service	Other	Totals
Driver and guard wages	550000	385000	110000	55000	1100000
Vehicle operating expenses	371000	26500	0	132500	530000
Vehicle depreciation	246000	61500	0	102500	410000
Customer representative salaries and expenses	0	0	396000	44000	440000
Office expenses	0	60000	90000	150000	300000
Administrative expenses	0	30000	360000	210000	600000
Total cost	1167000	563000	956000	694000	3380000
Workings:
	Travel	Pickup and Delivery	Customer service	Other
Driver and guard wages	=1100000*50%	=1100000*35%	=1100000*10%	=1100000*5%
Vehicle operating expenses	=530000*70%	=530000*5%	0	=530000*25%
Vehicle depreciation	=410000*60%	=410000*15%	0	=410000*25%
Customer representative salaries and expenses	0	0	=440000*90%	=440000*10%
Office expenses	0	=300000*20%	=300000*30%	=300000*50%
Administrative expenses	0	=600000*5%	=600000*60%	=600000*35%