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Exercise 7-2 (Algo) First Stage Allocation [LO72] SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los Angeles area.
Exercise 7-2 (Algo) First Stage Allocation [LO72] SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los Angeles area. The company is implementing an activitybased 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 pooll The Other cost pool has no activity measure because it is an organizationsustaining activity. The following costs will be assigned using the activitybased costing system: Driver and guard wages $ 920,000 Vehicle operating expense 350,000 Vehicle depreciation 230,000 Customer representative salaries and expenses 260,000 Office expenses 120,000 Administrative expenses 420,000 Total cost S 2,300,000 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. Required: Complete the first stage allocations of costs to activity cost pools. Pickup and Customer Travel Other Totals Delivery Service Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost
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