Question

SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the tos 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 de miles for the Travel cost peal number of pickups and deliveries for the pickup and Delivery costpool 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 casting system

please explain

Answer 1

First stage allocation

	Travel	Pickup and delivery	Customer service	Other	Totals
Driver and guard wages	450000	315000	90000	45000	900000
Vehicle operating expense	231000	16500	0	82500	330000
Vehicle depreciation	126000	31500	0	52500	210000
Customer representative salaries and expenses	0	0	216000	24000	240000
Office expenses	0	20000	30000	50000	100000
Administrative expenses	0	20000	240000	140000	400000
Total cost	807000	403000	576000	394000	2180000