1. Assume a company’s activity-based costing system included three expenses: Vehicle operating expenses, $300,000; Vehicle depreciation, $160,000; and Customer service salaries, $205,000. These costs were consumed by four activities as follows:Customers:TravelDeliveriesCustomer ServiceOtherTotalVehicle operating expenses45%40%10%5%100%Vehicle depreciation40%50%0%10%100%Customer service salaries20%30%35%15%100%How much total cost (including all three expenses) would be allocated to the Travel activity?A.) $260,750B.) $230,750C.) $240,000D.) $210,000

Activity based costing is the one wherein the costs are allocated based on specific cost drivers.…

Answered: Assume a company’s activity-based…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter15: Introduction To Managerial Accounting

Section: Chapter Questions

Problem 3CMA: A firm has 100,000 in direct materials costs, 50,000 in direct labor costs, and 80,000 in overhead....

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1. Assume a company’s activity-based costing system included three expenses: Vehicle operating expenses, $300,000; Vehicle depreciation, $160,000; and Customer service salaries, $205,000. These costs were consumed by four activities as follows:

Customers:

Travel	Deliveries	Customer Service	Other	Total
Vehicle operating expenses	45%	40%	10%	5%	100%
Vehicle depreciation	40%	50%	0%	10%	100%
Customer service salaries	20%	30%	35%	15%	100%

How much total cost (including all three expenses) would be allocated to the Travel activity?

A.) $260,750

B.) $230,750

C.) $240,000

D.) $210,000

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