Question

MobileCash Corporation operates a fleet of armoured cars that make scheduled pickups and deliveries for its...

MobileCash Corporation operates a fleet of armoured cars that make scheduled pickups and deliveries for its customers. The company is implementing an ABC system that has four activity cost pools: Travel, Pickup and Delivery, Customer Service, and Other. The activity measures are kilometres 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. The following costs will be assigned using the ABC system:

  Driver and guard wages $ 897,000
  Vehicle operating expense 308,000
  Vehicle depreciation 169,000
  Customer representative salaries and expenses 199,000
  Office expenses 49,500
  Administrative expenses 378,000
  Total cost $ 2,000,500

The distribution of resource consumption across the activity cost pools is as follows:

Travel Pickup
and
Delivery
Customer
Service
Other Totals
  Driver and guard wages 35 % 45 % 15 % 5 % 100 %
  Vehicle operating expense 65 % 10 % 0 % 25 % 100 %
  Vehicle depreciation 65 % 10 % 0 % 25 % 100 %
  Customer representative salaries
    and expenses
0 % 0 % 75 % 25 % 100 %
  Office expenses 0 % 25 % 35 % 40 % 100 %
  Administrative expenses 0 % 15 % 45 % 40 % 100 %

Required:

Carry out the first-stage allocations of costs to activity cost pools. (Do not leave any empty spaces; input a 0 wherever it is required.)

Homework Answers

Answer #1

Carry out the first-stage allocations of costs to activity cost pools. (Do not leave any empty spaces; input a 0 wherever it is required.)

Travel Pickup
and
Delivery
Customer service Other Total
Driver and guard wages 313950 403650 134550 44850 897000
Vehicle operating expense 200200 30800 0 77000 308000
Vehicle depreciation 109850 16900 0 42250 169000
Customer representative salaries and expenses 0 0 149250 49750 199000
Office expense 0 12375 17325 19800 49500
Administrative expenses 0 56700 170100 151200 378000
Total 624000 520425 471225 384850 2000500
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