SecuriCorp operates a fleet of armored cars that make scheduled pickups and deli
ID: 2518563 • Letter: S
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:
Complete the first stage allocations of costs to activity cost pools.
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:
Explanation / Answer
Pickup and Customer Travel Delivery Service Other Totals Driver and guard wages 520000 364000 104000 52000 1040000 Vehicle operating expense 329000 23500 0 117500 470000 Vehicle depreciation 210000 52500 0 87500 350000 Customer representative salaries and expenses 0 0 342000 38000 380000 Office expenses 0 48000 72000 120000 240000 Administrative expenses 0 27000 324000 189000 540000 Total cost 1059000 515000 842000 604000 3020000