SecuriCorp operates a fleet of armored cars that make scheduled pickups and deli
ID: 2527134 • 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: points Driver and guard wages Vehicle operating expense vehicle depre Customer representative salaries $1,160,000 590,000 470,000 eBook ciation 500,000 and expenses Office expenses Administrative expenses Total cost 360,000 660,000 $3,740,000 Hint Print The distribution of resource consumption across the activity cost pools is as follows: Pickup and Customer Travel Delivery Service other Totals 100% 100% 100% 10% Driver and guard wages Vehicle operating expense vehicle depreciat Customer representative salaries and 50% 703 608 35 5? 15% 58 25% 25% ion expenses Office expenses Administrative expenses 08 08 08 0% 20% 58 90% 30% 60% 10% 508 35 100% 100 100 Required: Complete the first stage allocations of costs to activity cost pools. Pickup and Customer Travel Other Totals Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Total costExplanation / Answer
First stage allocation :
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