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The Other cost pool has no activity measure because it is an organization-sustaining activity. The following cos be assigned using the activity-based costing system: Accounting
The Other cost pool has no activity measure because it is an organization-sustaining activity. The following cos be assigned using the activity-based costing system: Accounting data Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost $ 720,000 280,000 120,000 160,000 30,000 320,000 $1,630,000 SecuriCorp will use the following cost pools and activity measures. Travel Miles Pickup & Delivery Number of pickups & deliveries Customer Service Number of customers Other No activity measure (these costs are organizational sustaining.) The distribution of resource consumption across the activity cost pools is as follows: Pickup and Customer TravelDelivery 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% Below are the estimated total activity for the period for each cost pool. Assume the following extimated activity for the period for each cost pool Travel 314,000 miles Pickup & Delivery 12,240 pickups & deliveries combined Customer Service 250 customers Other No activity measure, these are organization sustaining costs | 2. Calculate the activity rates for each cost pool. Suppose SecuriCorp has a customer that will require 10,000 miles travel, and 300 pickups and deliveries. How much overhead cost should be assigned to this customer using ABC? 3. Assign overhead costs to this customer
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