Exercise 7-2 (Algo) First Stage Allocation [LO7-2] 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 $ 960,000 Vehicle operating expense 390,000 Vehicle depreciation 270,000 Customer representative salaries and expenses 300,000 Office expenses 160,000 Administrative expenses 460,000 Total cost $ 2,540,000   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.

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Chapter1: Financial Statements And Business Decisions
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Exercise 7-2 (Algo) First Stage Allocation [LO7-2]

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 $ 960,000
Vehicle operating expense 390,000
Vehicle depreciation 270,000
Customer representative salaries and expenses 300,000
Office expenses 160,000
Administrative expenses 460,000
Total cost $ 2,540,000

 

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.

 

 
The distribution of resource consumption across the activity cost pools is as follows:
Pickup and
Delivery
Customer
Travel
Service
Other
Totals
Driver and guard wages
Vehicle operating expense
Vehicle depreciation
Customer representative salaries and
50%
35%
10%
5%
100%
70%
5%
0%
25%
100%
60%
15%
0%
25%
100%
0용
0%
90응
10%
100%
expenses
Office expenses
Administrative expenses
0%
20%
30%
50%
100%
0%
5%
60%
35%
100%
Required:
Complete the first stage allocations of costs to activity cost pools.
Pickup and
Delivery
Customer
Travel
Other
Totals
Service
Driver and guard wages
Vehicle operating expense
Vehicle depreciation
Customer representative salaries and expenses
Office expenses
Administrative expenses
Total cost
Transcribed Image Text:The distribution of resource consumption across the activity cost pools is as follows: Pickup and Delivery Customer Travel Service Other Totals Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and 50% 35% 10% 5% 100% 70% 5% 0% 25% 100% 60% 15% 0% 25% 100% 0용 0% 90응 10% 100% expenses Office expenses Administrative expenses 0% 20% 30% 50% 100% 0% 5% 60% 35% 100% Required: Complete the first stage allocations of costs to activity cost pools. Pickup and Delivery Customer Travel Other Totals Service Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost
Exercise 7-2 (Algo) First Stage Allocation [LO7-2]
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
$ 960,000
390,000
270,000
expenses
Office expenses
Administrative expenses
300,000
160,000
460,000
$ 2,540,000
Total cost
The distribution of resource consumption across the activity cost pools is as follows:
TTTIT
Pickup and
Delivery
Customer
Travel
Service
Other
Totals
Driver and guard wages
Vehicle operating expense
Vehicle depreciation
Customer representative salaries and
50%
35%
10%
5%
100%
70%
5%
0%
25%
100%
60%
15%
0%
25%
100%
0%
0%
90%
10%
100%
expenses
Office expenses
Administrative expenses
0%
20%
30%
50%
100%
0%
5%
60%
35%
100%
Required:
Complete the first stage allocations of costs to activity cost pools.
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Transcribed Image Text:Exercise 7-2 (Algo) First Stage Allocation [LO7-2] 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 $ 960,000 390,000 270,000 expenses Office expenses Administrative expenses 300,000 160,000 460,000 $ 2,540,000 Total cost The distribution of resource consumption across the activity cost pools is as follows: TTTIT Pickup and Delivery Customer Travel Service Other Totals Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and 50% 35% 10% 5% 100% 70% 5% 0% 25% 100% 60% 15% 0% 25% 100% 0% 0% 90% 10% 100% expenses Office expenses Administrative expenses 0% 20% 30% 50% 100% 0% 5% 60% 35% 100% Required: Complete the first stage allocations of costs to activity cost pools. < Prev 9 of 18 Next >
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