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 840,000 270,000 150,000 Customer representative salaries and expenses 180,000 Office expenses Administrative expenses 40,000 340,000 $1,820,000 Total cost The distribution of resource consumption across the activity cost pools is as follows: Pickup and Customer Delivery Travel Service Other Totals Driver and guard wages Vehicle operating expense Vehicle depreciation 100 501 35% 10% 5 %S 70% 5% 0% 258 100% 60% 15% 08 25% 100% Customer representative salaries and 100 0% 0% 90% 10% expenses Office expenses Administrative expenses 208 30% 503 100% 358 0% 5 % 60% 1008 Required: Complete the first stage allocations of costs to activity cost pools.

Answer 1

First stage allocation

	Travel	Pickup and delivery	Customer service	Other	Total
Driver and guard wages	420000	294000	84000	42000	840000
Vehicle operating expense	189000	13500	0	67500	270000
Vehicle depreciation	90000	22500	0	37500	150000
Customer representative salaries and expenses	0	0	162000	18000	180000
Office expense	0	8000	12000	20000	40000
Administrative expense	0	17000	204000	119000	340000
Total Cost	699000	355000	462000	304000	1820000