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 $ 1,040,000 Vehicle operating expense 470,000 Vehicle depreciation 350,000 Customer representative salaries and expenses 380,000 Office expenses 240,000 Administrative expenses 540,000 Total cost $ 3,020,000 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 50 % 35 % 10 % 5 % 100 % Vehicle operating expense 70 % 5 % 0 % 25 % 100 % Vehicle depreciation 60 % 15 % 0 % 25 % 100 % Customer representative salaries and expenses 0 % 0 % 90 % 10 % 100 % Office expenses 0 % 20 % 30 % 50 % 100 % Administrative expenses 0 % 5 % 60 % 35 % 100 % Required: Complete the first stage allocations of costs to activity cost pools.

Answer 1

Complete the first stage allocations of costs to activity cost pools.

	Travel	Pickup and Delivery	Customer Service	Other	Total
Driver and guard wages	520000	364000	104000	52000	1040000
Vehicle operating expense	329000	23500	0	117500	470000
Vehicle depreciation	210000	52500	0	87500	350000
Customer representative salaries and expenses	0	0	342000	38000	380000
Office expenses	0	48000	72000	120000	240000
Administrative expenses	0	27000	324000	189000	540000
Total	1059000	515000	842000	604000	3020000