SecuriCorp operates a fleet of armored cars that make scheduled pickups and deli
ID: 2588460 • 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: Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries $1,140,000 570,000 450,000 480,000 and expenseS Office expense Administrative expenses Total cost 340,000 640,000 $3,620,000 The distribution of resource consumption across the activity cost pools is as follows Pickup and Customer Travel Del Totals 100% 100% 100% ivery Service 35% Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and 50% 70% 60% 10% 0% 0% Other 5 25% 25% 5 expenses Office expense Administrative expenses 0% 08 0% 15% 0% 5 90% 30% 60% 10% 50% 35% 100% 100% 100% 20%Explanation / Answer
Pickup and travel Customer delivery Service Other Total Driver and guard wages 570000 399000 114000 57000 1140000 Vehicle operating expense 399000 28500 0 142500 570000 Vehicle depreciation 270000 67500 0 112500 450000 Customer representative salaries and expenses 0 0 432000 48000 480000 Office expenses 0 68000 102000 170000 340000 Administrative expenses 0 32000 384000 224000 640000 Total cost 1239000 595000 1032000 754000 3620000