SecuriCorp operates a fleet of armored cars that make scheduled pickups and deli
ID: 2552170 • 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:
The distribution of resource consumption across the activity cost pools is as follows:
Required:
Complete the first stage allocations of costs to activity cost pools.
Driver and guard wages $ 980,000 Vehicle operating expense 410,000 Vehicle depreciation 290,000 Customer representative salaries and expenses 320,000 Office expenses 180,000 Administrative expenses 480,000 Total cost $ 2,660,000Explanation / Answer
Answer:-
Particulars Travel Pickup & delivery Customer service Others Totals $ $ $ $ $ Driver and guard wages $980000*50%=490000 $980000*35%=343000 $980000*10%=98000 $980000*5%=49000 980000 Vehicle opreating expenses $410000*70%=287000 $410000*5%=20500 0 $410000*25%=102500 410000 Vehicle depreciation $290000*60%=174000 $290000*15%=43500 0 $290000*25%=72500 290000 Customer representative salaries and expenses 0 0 $320000*90%=288000 $320000*10%=32000 320000 Office expenses 0 $180000*20%=36000 $180000*30%=54000 $180000*50%=90000 180000 Administrative expenses $480000*5%=24000 $480000*60%=288000 $480000*35%=168000 480000 Totals 951000 467000 728000 514000 2660000