Gwynnie Pie Company Makes Dessert Pies for National Fast Food

question 87

Multiple Choice

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

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Definitions:

Hedonism

The ethical theory that pleasure (in the sense of the satisfaction of desires) is the highest good and proper aim of human life.

Universalism

The ideological belief in universal applicability or effectiveness of concepts across different cultures or situations.

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A measure of an individual's or family's economic and social position relative to others, based on income, education, and occupation.

PTSD

Posttraumatic Stress Disorder, a mental health condition triggered by experiencing or witnessing a terrifying event, characterized by flashbacks, nightmares, and severe anxiety.