Gwynnie Pie Company makes dessert pies for national fast food chains. Gwynnie Pie Company is considering using ABC costing and has the following activity cost pools and information available: Gwynnie Pie Company currently uses a plantwide overhead rate based on total estimated machine hours of 100,000 hours.
The following information was gathered regarding Job 607:
# of units in the job = 5,000
# of units in each batch = 1,000
# of setups required to complete the job = 1
# of machine hours = 220
How much would the overhead be overcosted or undercosted if Gwynnie Pie Company continues to use the plantwide overhead rate as opposed to using ABC Costing?
A)$931.69 undercosted
B)$994.40 overcosted
C)$62.71 overcosted
D)$45.34 undercosted

Question

Gwynnie Pie Company makes dessert pies for national fast food chains. Gwynnie Pie Company is considering using ABC costing and has the following activity cost pools and information available:  Gwynnie Pie Company currently uses a plantwide overhead rate based on total estimated machine hours of 100,000 hours.
The following information was gathered regarding Job 607:
# of units in the job = 5,000
# of units in each batch = 1,000
# of setups required to complete the job = 1
# of machine hours = 220
How much would the overhead be overcosted or undercosted if Gwynnie Pie Company continues to use the plantwide overhead rate as opposed to using ABC Costing?
A)$931.69 undercosted 
B)$994.40 overcosted 
C)$62.71 overcosted 
D)$45.34 undercosted

Quizplus · Accepted Answer

The Answer of Gwynnie Pie Company makes dessert pies for national fast food chains. Gwynnie Pie Company is considering using ABC costing and has the following activity cost pools and information available:  Gwynnie Pie Company currently uses a plantwide overhead rate based on total estimated machine hours of 100,000 hours.
The following information was gathered regarding Job 607:
# of units in the job = 5,000
# of units in each batch = 1,000
# of setups required to complete the job = 1
# of machine hours = 220
How much would the overhead be overcosted or undercosted if Gwynnie Pie Company continues to use the plantwide overhead rate as opposed to using ABC Costing?
A)$931.69 undercosted 
B)$994.40 overcosted 
C)$62.71 overcosted 
D)$45.34 undercosted

Gwynnie Pie Company Makes Dessert Pies for National Fast Food