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Problem
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
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
2,300,000
The distribution of resource consumption across the activity cost pools is as follows:
Travel
Pickup and Delivery
Customer Service
Other
Totals
50
%
35
10
5
100
70
0
25
60
15
90
20
30
Required:
Complete the first stage allocations of costs to activity cost pools.
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