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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: Estimated Overhead Costs Estimated Activity Activities 2,500 batches Material handling measured by batches $250,000 $114,000 $78,000 $15,000 2,400 batches Mixing measured by batches 1,950,000 units 260 setups Packaging measured by units Maintenance measured by # of setups 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 4,700 #of units in each batch 940 #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? O A. $983.19 undercosted O B. $1,005.40 overcosted O C. $57.69 undercosted O D. $22.21 overcosted

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: Estimated Overhead Costs Estimated Activity Activities 2,500 batches Material handling measured by batches $250,000 $114,000 $78,000 $15,000 2,400 batches Mixing measured by batches 1,950,000 units 260 setups Packaging measured by units Maintenance measured by # of setups 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 4,700 #of units in each batch 940 #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? O A. $983.19 undercosted O B. $1,005.40 overcosted O C. $57.69 undercosted O D. $22.21 overcosted

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 9PA: Carltons Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to...
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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? 

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: Estimated Overhead Costs Estimated Activity Activities 2,500 batches Material handling measured by batches $250,000 $114,000 $78,000 $15,000 2,400 batches Mixing measured by batches 1,950,000 units 260 setups Packaging measured by units Maintenance measured by # of setups 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 4,700 #of units in each batch 940 #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? O A. $983.19 undercosted O B. $1,005.40 overcosted O C. $57.69 undercosted O D. $22.21 overcosted
Transcribed Image Text: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: Estimated Overhead Costs Estimated Activity Activities 2,500 batches Material handling measured by batches $250,000 $114,000 $78,000 $15,000 2,400 batches Mixing measured by batches 1,950,000 units 260 setups Packaging measured by units Maintenance measured by # of setups 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 4,700 #of units in each batch 940 #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? O A. $983.19 undercosted O B. $1,005.40 overcosted O C. $57.69 undercosted O D. $22.21 overcosted
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