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:ActivitiesEstimated Overhead CostsEstimated ActivityMaterial handling measured by batches$250,0002,500 batchesMixing measured by batches$112,0002,500 batchesPackaging measured by units$75,0002,500,000 unitsMaintenance measured by # of setups$15,000260 setupsGwynnie Pie Company currently uses a plantwide overhead rate based on total estimated machine hours of 100,000 hours.Based on the above information, what would the activity cost allocation rate be for material handling? Question 14 options: $44.80 per batch $0.03 per unit $4.52 per machine hour $100 per batch

Activity cost allocation = Estimated overhead cost/estimated activity

Answered: Gwynnie Pie Company makes dessert pies…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter6: Process Costing

Section: Chapter Questions

Problem 13E: Friedman Company uses JIT manufacturing. There are several manufacturing cells set up within one of...

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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:

Activities	Estimated Overhead Costs	Estimated Activity
Material handling measured by batches	$250,000	2,500 batches
Mixing measured by batches	$112,000	2,500 batches
Packaging measured by units	$75,000	2,500,000 units
Maintenance measured by # of setups	$15,000	260 setups