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 Vehiele depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost $ 940.000 370,000 250,000 280.000 140,000 440,000 $2,420,000 The distribution of resource consumption across the activity cost pools is as follows: Pickup and Delivery Travel 500 Customer Service Other Totale Driver and guard wages Vehbele operating expense Vehiele depreciation Customer representative salaries and 1000 Office expenses Administrative expenses 1000 Required: Complete the first stage allocations of costs to activity cost pools Customer Pickup and Delivery Travel Service Driver and Guard wages

Answer 1

First stage allocation

	Travel	Pickup and delivery	Customer service	Other	Totals
Driver and guard wages	470000	329000	94000	47000	940000
Vehicle operating expense	259000	18500	0	92500	370000
Vehicle depreciation	150000	37500	0	62500	250000
Customer representative salaries and expenses	0	0	252000	28000	280000
Office expenses	0	28000	42000	70000	140000
Administrative expenses	0	22000	264000	154000	440000
Total cost	879000	435000	652000	454000	2420000