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	$	880,000
Vehicle operating expense		310,000
Vehicle depreciation		190,000
Customer representative salaries and expenses		220,000
Office expenses		80,000
Administrative expenses		380,000
Total cost	$	2,060,000

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.

		Pickup and	Customer
	Travel	Delivery	Service	Other	Totals
Driver and guard wages					$0
Vehicle operating expense					0
Vehicle depreciation					0
Customer representative salaries and expenses					0
Office expenses					0
Administrative expenses					0
Total cost	$0	$0	$0	$0	$0

Answer 1

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

Pickup and Customer Travel Delivery Service Other Totals Driver and guard wages 440000 308000 88000 44000 880000 Vehicle operating expense 217000 15500 0 77500 310000 Vehicle depreciation 114000 28500 0 47500 190000 Customer representative salaries and expenses 0 0 198000 22000 220000 Office expenses 0 16000 24000 40000 80000 Administrative expenses 0 19000 228000 133000 380000 Total cost 771000 387000 538000 364000 2060000