Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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

$

1,140,000

Vehicle operating expense

570,000

Vehicle depreciation

450,000

Customer representative salaries and expenses

480,000

Office expenses

340,000

Administrative expenses

640,000

Total cost

$

3,620,000

The distribution of resource consumption across the activity cost pools is as follows:

Travel

Pickup and Delivery

Customer 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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting The Basics

Authors: Ilias Basioudis

1st Edition

1138605514, 9781138605510

More Books

Students also viewed these Accounting questions

Question

7 Describe the role of an HR business partner

Answered: 1 week ago

Question

5 Explain the concept of the psychological contract.

Answered: 1 week ago