FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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
$ 840,000
270,000
150,000
180,000
40,000
340,000
$ 1,820,000
The distribution of resource consumption across the activity cost pools is as follows:
Pickup and
Customer
Travel
Delivery
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.
Driver and guard wages
Vehicle operating expense
Vehicle depreciation
Customer representative salaries and expenses
Office expenses
Administrative expenses
Total cost
Travel
Pickup and Customer
Delivery
Service
Other
Totals
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Transcribed Image Text: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 $ 840,000 270,000 150,000 180,000 40,000 340,000 $ 1,820,000 The distribution of resource consumption across the activity cost pools is as follows: Pickup and Customer Travel Delivery 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. Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost Travel Pickup and Customer Delivery Service Other Totals
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