Reference no: EM133180762
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 $980,000
Vehicle operating expense 410,000
Vehicle depreciation 290,000
Customer representative salaries and expenses 320,000
Office expenses 180,000
Administrative expenses 480,000
Total cost $2,660,000
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.