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 $ 1,160,000 590,000 478,000 500,000 360,000 660,000 $ 3,740,00 The distribution of resource consumption across the activity cost pools is as follows: Travel Sex 70% 60% Pickup and Delivery 35% 5% 15% Customer Service 10% ex ok Other SX 25 25% Total 100% 100% 1001 Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses office expenses Administrative expenses 0% ex ON 2015 5% 90% BOX 50% 10% SOR 35% 10 100% 100%

Answer 1

	Travel	Pickup and Delivery	Customer Service	Other	Totals
Driver and guard wages	580000	406000	116000	58000	1160000
Vehicle operating expense	413000	29500	0	147500	590000
Vehicle depreciation	282000	70500	0	117500	470000
Customer representative salaries and expenses	0	0	450000	50000	500000
Office expenses	0	72000	108000	180000	360000
Administrative expenses	0	33000	396000	231000	660000
Total cost	1275000	611000	1070000	784000	3740000

Workings:
	Travel	Pickup and Delivery	Customer Service	Other
Driver and guard wages	=1160000*50%	=1160000*35%	=1160000*10%	=1160000*5%
Vehicle operating expense	=590000*70%	=590000*5%	0	=590000*25%
Vehicle depreciation	=470000*60%	=470000*15%	0	=470000*25%
Customer representative salaries and expenses	0	0	=500000*90%	=500000*10%
Office expenses	0	=360000*20%	=360000*30%	=360000*50%
Administrative expenses	0	=660000*5%	=660000*60%	=660000*35%