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 activty 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 Vehicle depreciation Customer representative salaries and expenses Office expenses S 880,000 310,000 190,000 220,000 80,000 380,000 Total cost S 2,060,000 The distribution of resource consumption across the activity cost pools is as follows: and Customer TravelDelivery Service Other Totals 10% Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses 5% 25% 25% 10% 50% 35% 100% 100% 100% 100% 100% 100% 50% 70% 0% 0% 5% 15% 5% 60% Required: Complete the first stage allocations of costs to activity cost pools. Pickup and Customer Travel Other Totals Driver and guard wages Vehicle operating expense Customer representative salaries and expenses Office expenses Total cost

Answer 1

	Travel	Pick up & Delivery	Customer Service	Other	Total
Driver and guard wages	440000	308000	88000	44000	880000
Vehicle operating expense	217000	15500	0	77500	310000
Vehicle depreciation	114000	28500	0	47500	190000
Customer representative salaries and expenses	0	0	198000	22000	220000
Office expenses	0	16000	24000	40000	80000
Administrative expenses	0	19000	228000	133000	380000
Total cost	771000	387000	538000	364000	2060000