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:

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:

Required:

Complete the first stage allocations of costs to activity cost pools.

Explanation

Driver and guard wages:

Travel = $1,200,000 × 50% = $600,000

Pickup and Delivery = $1,200,000 × 35% = $420,000

Customer Service = $1,200,000 × 10% = $120,000

Other = $1,200,000 × 5% = $60,000

Vehicle operating expense:

Travel = $630,000 × 70% = $441,000

Pickup and Delivery = $630,000 × 5% = $31,500

Customer Service = $630,000 × 0% = $0

Other = $630,000 × 25% = $157,500

Vehicle depreciation:

Travel = $510,000 × 60% = $306,000

Pickup and Delivery = $510,000 × 15% = $76,500

Customer Service = $510,000 × 0% = $0

Other = $510,000 × 25% = $127,500

Customer representative salaries and expenses:

Travel = $540,000 × 0% = $0

Pickup and Delivery = $540,000 × 0% = $0

Customer Service = $540,000 × 90% = $486,000

Other = $540,000 × 10% = $54,000

Office expenses:

Travel = $400,000 × 0% = $0

Pickup and Delivery = $400,000 × 20% = $80,000

Customer Service = $400,000 × 30% = $120,000

Other = $400,000 × 50% = $200,000

Administrative expenses:

Travel = $700,000 × 0% = $0

Pickup and Delivery = $700,000 × 5% = $35,000

Customer Service = $700,000 × 60% = $420,000

Other = $700,000 × 35% = $245,000

Thanks