Business, 13.10.2020 05:01, anthonylemus36
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 $252,000 2,400 batches
Mixing measured by batches $115,000 3,680 batches
Packaging measured by units $76,000 1,900,000 units
Maintenance measured by # of setups $15,000 260 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 = 5,300
# of units in each batch = 1,060
# of setups required to complete the job = 1
# of machine hours = 220
Required:
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?
Answers: 3
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