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 po 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 Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost $ 1,180,000 610,000 490,000 Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses 520,000 380,000 680,000 $ 3,860,000 The distribution of resource consumption across the activity cost pools is as follows: Pickup and Customer Delivery Service 35% 54 Travel 50% 70% 60% 0% 0% 04 15% 0% 20% 5% Required: Complete the first stage allocations of costs to activity cost pools. 10% 0% 0% 90% 30% 60% Other 5% 25% 25% 10% 50% 35% Totals 100% 100% 100% 100% 100% 100%
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 po 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 Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost $ 1,180,000 610,000 490,000 Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses 520,000 380,000 680,000 $ 3,860,000 The distribution of resource consumption across the activity cost pools is as follows: Pickup and Customer Delivery Service 35% 54 Travel 50% 70% 60% 0% 0% 04 15% 0% 20% 5% Required: Complete the first stage allocations of costs to activity cost pools. 10% 0% 0% 90% 30% 60% Other 5% 25% 25% 10% 50% 35% Totals 100% 100% 100% 100% 100% 100%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
Vehicle operating expense
Vehicle depreciation
Customer representative salaries and
expenses
Office expenses
Administrative expenses
Total cost
Driver and guard wages
Vehicle operating expense
Vehicle depreciation
Customer representative salaries and
expenses
Office expenses
Administrative expenses
$ 1,180,000
610,000
490,000
The distribution of resource consumption across the activity cost pools is as follows:
Pickup and Customer
Service
10%
ON
520,000
380,000
680,000
$ 3,860,000
Driver and guard wages
Vehicle operating expense
Vehicle depreciation
Customer representative salaries and expenses
Office expenses
Travel
50%
70%
60%
0%
0%
0%
Delivery
35%
5%
15%
Required:
Complete the first stage allocations of costs to activity cost pools.
Travel
0%
20%
5%
04
90%
30%
60%
Other
5%
25%
25%
10%
50%
35%
Pickup and Customer
Delivery
Service
Totals
100%
100%
100%
100%
100%
100%
Other
Totals
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