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 $1,220,000 650,000 530,000 560,000 420,000 720,000 $4,100,000 

The distribution of resource consumption across the activity cost pools is as follows: 

Pickup and Delivery 35% Travel 50% 70% 60% Customer Service 10% 0% 0% Other 5% 25% 25% Totals 100% 100% 100% 5% 15% Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses office expenses Administrative expenses 0% 0% 0% 20% 5% 90% 30% 60% 10% 50% 35% 100% 100% 100% 0%

Required: 

Complete the first-stage allocations of costs to activity cost pools. 

Customer Service Other Totals Pickup and Travel Delivery Driver and guard wages Vehicle operating expense Vehicle depreciation This is a numeric cell, so please Customer representative salaries and exper! enter numbers only. Office expenses Administrative expenses Total cost

Answer 1

		Pickup and	Customer
	Travel	Delivery	Service	Other	Totals
	[(a) X (i)]	[(a) X (ii)]	[(a) X (iii)]	[(a) X (iv)]
Driver and guard wages	$       6,10,000	$ 4,27,000	$   1,22,000	$     61,000	$ 12,20,000
Vehicle operating expenses	$       4,55,000	$     32,500	0	$ 1,62,500	$   6,50,000
Vehicle depreciation	$       3,18,000	$     79,500	0	$ 1,32,500	$   5,30,000
Customer representative salaries and expenses	0	0	$   5,04,000	$     56,000	$   5,60,000
Office expenses	0	$     84,000	$   1,26,000	$ 2,10,000	$   4,20,000
Administrative expenses	0	$     36,000	$   4,32,000	$ 2,52,000	$   7,20,000
Total cost	$     13,83,000	$ 6,59,000	$ 11,84,000	$ 8,74,000	$ 41,00,000
			Pickup and	Customer
	Cost	Travel	Delivery	Service	Other	Totals
	(a)	(i)	(ii)	(iii)	(iv)
Driver and guard wages	$     12,20,000	50%	35%	10%	5%	100%
Vehicle operating expenses	$       6,50,000	70%	5%	0%	25%	100%
Vehicle depreciation	$       5,30,000	60%	15%	0%	25%	100%
Customer representative salaries and expenses	$       5,60,000	0%	0%	90%	10%	100%
Office expenses	$       4,20,000	0%	20%	30%	50%	100%
Administrative expenses	$       7,20,000	0%	5%	60%	35%	100%
Total cost	$     41,00,000

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