Question

MobileCash Corporation operates a fleet of armoured cars that make scheduled pickups and deliveries for its customers. The company is implementing an ABC system that has four activity cost pools: Travel, Pickup and Delivery, Customer Service, and Other. The activity measures are kilometres 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. The following costs will be assigned using the ABC system:
Driver and guard wages . . . . . . . . . . . . . . . . . . . . . . . . . . ..... $ 840,000
Vehicle operating expense . . . . . . . . . . . . . . . . . . . . . . . ...... 270,000
Vehicle depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 150,000
Customer representative salaries and expenses . . . . . . . . . . . . . . . . 180,000
Office expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 40,000
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . ..... 340,000
Total cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........ $1,820,000
The distribution of resource consumption across the activity cost pools is as follows:
Required:
Carry out the first-stage allocations of costs to activity cost pools as illustrated in Exhibit.


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  • CreatedJuly 08, 2015
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