SecuriCorp operates a fleet of armored cars that make scheduled pickups and deli
ID: 2578072 • 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 $ 920,000 Vehicle operating expense 350,000 Vehicle depreciation 230,000 Customer representative salaries and expenses 260,000 Office expenses 120,000 Administrative expenses 420,000 Total cost $ 2,300,000Explanation / Answer
Travel Pickup and delivery customer service other total driver and guard wages 920000 460000 [920000*.50 322000 [920000*.35 92000 [920000*.10] 46000 [920000*.05] 920000 vehicle operating expense 350000 245000 [350000*.70 17500 [350000*.05] 0 87500 [350000*.25] 350000 Vehicle depreciation 230000 138000 [230000*.60] 34500 [230000*.15] 0 57500 [230000*.25] 230000 Customer representative salaries and expenses 260000 0 0 234000 [260000*.90] 26000 260000 office expense 120000 0 24000 [120000*.20] 36000 [120000*.30] 60000 120000 Administrative expenses 420000 0 21000 [420000*.05] 252000 [420000*.60] 147000 [420000*.35] 420000 Total cost 843000 419000 614000 424000 2300000