Exercise 7-2 (Algo) First Stage Allocation [LO7-2]

Exercise 7-2 (Algo) First Stage Allocation (LO7-2] SecuriCorp operates 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: $ 1,180,000 610,000 490,000 Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost 520,000 380,000 680,000 $ 3,860,000 The distribution of resource consumption across the activity cost pools is as follows: Travel 50% 70% 60% Pickup and Delivery 35% 53 15% Customer Service 10% 0% 03 Other 5% 25% Totals 100% 100% 100% 25% Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses 0% 0% 0% 0 % 20% 5% 90% 30% 60% 10% 50% 35% 100% 100% 100% Required: Complete the first stage allocations of costs to activity cost pools. Answer is complete but not entirely correct. Other Totals $ $ Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost Pickup and Customer Travel Delivery Service 450,000 $ 315,000 $ 90,000 231,000 $ 16,500 X 0 126,000 X 31,500 0 0 0 216,000 0 20,000 30,000 0 20,000 X 240,000 807,000 $ 403,000 $ 576,000 OO 45,000 X $ 900,000 82,500 X 330,000 52,500 X 210,000 24,000 > 240,000 50,000 100,000 140,000 X 400,000 394,000 $ 2,180,000 $ $