Required: Complete the first-stage allocations of costs to activity cost pools. Pickup and Customer Travel Delivery Service Other Totals Driver and guard wages 2$ 590 2$ 590 Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost 2$ 590 $ 이 $ %24 %24 590
Required: Complete the first-stage allocations of costs to activity cost pools. Pickup and Customer Travel Delivery Service Other Totals Driver and guard wages 2$ 590 2$ 590 Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost 2$ 590 $ 이 $ %24 %24 590
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:### Educational Resource: Cost Allocation to Activity Cost Pools
#### Task:
Complete the first-stage allocations of costs to activity cost pools.
#### Table Overview:
The table below categorizes costs into different activity cost pools. The columns represent various activities, while the rows list different types of costs.
| | Travel | Pickup and Delivery | Customer Service | Other | Totals |
|------------------------------------|--------|---------------------|------------------|-------|--------|
| **Driver and guard wages** | $590 | | | | $590 |
| **Vehicle operating expense** | | | | | 0 |
| **Vehicle depreciation** | | | | | 0 |
| **Customer representative salaries and expenses** | | | | | 0 |
| **Office expenses** | | | | | 0 |
| **Administrative expenses** | | | | | 0 |
| **Total cost** | $590 | $0 | $0 | $0 | $590 |
#### Explanation:
- **Driver and guard wages:** Allocated entirely to the "Travel" cost pool, totaling $590.
- **Vehicle operating expense, Vehicle depreciation, Customer representative salaries and expenses, Office expenses, Administrative expenses:** These categories currently show no allocated costs (0) across all activity cost pools.
- **Total cost:** The overall expenditure for "Travel" is $590, with other categories currently unallocated.
This table serves as a foundational step in understanding how different costs are associated with specific activities within an organization.
Transcribed Image Text:### Overview
SecuriCorp operates a fleet of armored cars in Los Angeles, focusing on scheduled pickups and deliveries. The company is transitioning to an activity-based costing system with four activity cost pools: Travel, Pickup and Delivery, Customer Service, and Other. Each cost pool uses specific activity measures:
- **Travel Cost Pool**: Measured in miles.
- **Pickup and Delivery Cost Pool**: Based on the number of pickups and deliveries.
- **Customer Service Cost Pool**: Determined by the number of customers.
- **Other Cost Pool**: Organization-sustaining activities without a specific measure.
### Cost Assignment
#### Costs to be Assigned
- **Driver and guard wages**: $1,180,000
- **Vehicle operating expense**: $610,000
- **Vehicle depreciation**: $490,000
- **Customer representative salaries and expenses**: $520,000
- **Office expenses**: $380,000
- **Administrative expenses**: $680,000
**Total Cost**: $3,860,000
### Resource Consumption Distribution
The resource consumption is distributed across the activity cost pools as follows:
| Expense Type | 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% |
This table reflects the allocation of costs to each activity base, helping allocate overhead more precisely in accordance with the activities that generate these costs.
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