SecuriCorp operates a fleet of armored cars that make schedu

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 organizatión-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 1,060,000 490,000 370,000 400,000 and expenses Office expenses 260,000 560,000 Administrative expensers Total cost $3,140,000 The distribution of resource consumption across the activity cost pools is as follows: Pickup andCustomer 35 15% Travel Delivery Service Other Totals 100% 50% 70% 60% Driver and guard vages 5 1001 100% 25 0N 08 25% 10% 508 358 Vehicle depreelation Custoner representative salaries and expenses office expenses Adninistrative expenses 0% 0% oe 20% 5% 909 30 60% 100% 1008 1008 Required:

Solution

The first stage allcoation of cost to activity cost pools

		Pickup and	Customer
	Travel	Delivery	Service	Other	Totals
Driver abd guard wages	530000	371000	106000	53000	1060000
Vehicle operating expense	343000	24500	0	122500	490000
Vehicle depreciation	222000	55500	0	92500	370000
Customer representative salaries and expenses	0	0	360000	40000	400000
office expenses	0	52000	78000	130000	260000
Administrative expenses	0	28000	336000	196000	560000
Total cost	1095000	531000	880000	634000	3140000