SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los Angeles area. The company is i
mplementing 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 $960,000
Vehicle operating expense 390,000
Vehicle depreciation 270,000
Customer representative salaries and expenses 300,000
Office expenses 160,000
Administrative expenses 460,000
Total cost $2,540,000
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% 5% 0% 25% 100%
60% 15% 0% 25% 100%
0% 0% 90% 10% 100%
0% 20% 30% 50% 100%
0% 5% 60% 35% 100%
Required:
Complete the first stage allocations of costs to activity cost pools.
Driver and guard wages $960,000
Vehicle operating expense 390,000
Vehicle depreciation 270,000
Customer representative salaries and expenses 300,000
Office expenses 160,000
Administrative expenses 460,000
Total cost $2,540,000
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% 5% 0% 25% 100%
60% 15% 0% 25% 100%
0% 0% 90% 10% 100%
0% 20% 30% 50% 100%
0% 5% 60% 35% 100%
Required:
Complete the first stage allocations of costs to activity cost pools.
1 answer:
Answer:
attached below is the table showing the first stage of allocations of cost to activity
Explanation:
The first stage of allocations of cost to activity cost pools
is calculated by :
( percentage cost of distribution ) * ( cost assigned )
1) Driver and Guards wages
Travel = 960000 * 50% = $480000
pickup and delivery = 960000 * 35% = $336000
customer service = 960000 * 10% = $96000
other = 960000 * 5% = $48000
Total = $960000
2) Vehicle operating expense
Travel = 390000 * 70% = 273000
pickup and delivery = 390000 * 5% = 19500
customer service = 390000 * 0% = 0
other = 390000 * 25% = 97500
Total = $390000
3) vehicle depreciation
Travel = 270000 * 60% = 162000
Pickup and delivery = 270000 * 15% = 40500
customer service = 270000 * 0% = 0
other = 270000 * 25% = 67500
Total = $270000
4) customer rep salaries and expenses
Travel = 300000 * 0 % = 0
pickup and delivery = 300000 * 0% = 0
customer service = 300000 * 90% = 270000
other = 300000 * 10% = 30000
Total = $300000
5) office expenses
travel = 160000 * 0% = 0
pickup and delivery = 160000 * 20% = 32000
customer service = 160000 * 30% = 48000
other = 160000 * 50% = $80000
Total = $160000
6) Administrative expenses
Travel = 460000 * 0% = 0
pickup and delivery = 460000 * 5% = 23000
customer service = 460000 * 60% = 276000
other = 460000 * 35% = 161000
total = $460000
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