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 Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost $1,000,000 430,000 310,000 340,000 200,000 500,000 $2,780,000 The distribution of resource consumption across the activity cost pools is as follows: Pickup and Customer Travel Delivery Service Other 50% 35% 10% 5% 70% 0% 25% 60% 15% 25% Totals 100% 100% 100% 5% 0% Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses 0% 90% 0% 0% 0% 20% 5% 30% 60% 10% 50% 35% 100% 100% 100% Required: Complete the first stage allocations of costs to activity cost pools.

Answer 1

Travel Totals 500000 3010000 186000 Pickup and Delivery 350000 21500 46500 Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and exenses Office expenses Administrative expenses Total cost Customer Other Serive 100000 50000 01107500 0 77500 306000 34000 60000 100000 300000 175000 766000 544000 1000000 430000 310000 340000 200000 500000 2780000 ol 40000 25000 483000 987000 Allocation of cost = Individual cost * Repective percentage of cost