Cooper's Bags Company manufactures cloth grocery bags to be sold to grocery stores and other retailers. Cooper's Bags Company sells the bags in cases of 1,500 bags. The bags come in three sizes: Large, Medium, and Small. Currently, Cooper's Bags Company uses a single plantwide overhead rate to allocate its $7,582,000 of annual manufacturing overhead. Of this amount, $2,270,000 is associated with the Large Bag line, $3,411,000 is associated with the Medium Bag line, and $1,901,000 is associated wil the Small Bag line. Cooper's Bags Company is currently running a total of 30,000 machine hours: 13,600 in the Large Bag line, 15,800 in the Medium Bag line, and 9,600 in the Small Bag line. Cooper's Bags Company uses machine hours as the cost driver for manufacturing overhead costs. Which product line(s) have been overcosted or undercosted by using the plantwide manufacturing overhead rate? (XXL) OA. Large Bags has been overcosted: Medium and Small have been undercosted. OB. Large, Medium, and Small Bags have all been undercosted. OC. Large, Medium, and Small Bags have all been overcosted. OD. Large Bags has been undercosted; Medium and Small have been overcosted.
Cooper's Bags Company manufactures cloth grocery bags to be sold to grocery stores and other retailers. Cooper's Bags Company sells the bags in cases of 1,500 bags. The bags come in three sizes: Large, Medium, and Small. Currently, Cooper's Bags Company uses a single plantwide overhead rate to allocate its $7,582,000 of annual manufacturing overhead. Of this amount, $2,270,000 is associated with the Large Bag line, $3,411,000 is associated with the Medium Bag line, and $1,901,000 is associated wil the Small Bag line. Cooper's Bags Company is currently running a total of 30,000 machine hours: 13,600 in the Large Bag line, 15,800 in the Medium Bag line, and 9,600 in the Small Bag line. Cooper's Bags Company uses machine hours as the cost driver for manufacturing overhead costs. Which product line(s) have been overcosted or undercosted by using the plantwide manufacturing overhead rate? (XXL) OA. Large Bags has been overcosted: Medium and Small have been undercosted. OB. Large, Medium, and Small Bags have all been undercosted. OC. Large, Medium, and Small Bags have all been overcosted. OD. Large Bags has been undercosted; Medium and Small have been overcosted.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject : Accounting
Transcribed Image Text:Cooper's Bags Company manufactures cloth grocery bags to be sold to grocery stores and other retailers. Cooper's Bags Company sells the bags in cases of 1,500 bags. The
bags come in three sizes: Large, Medium, and Small. Currently, Cooper's Bags Company uses a single plantwide overhead rate to allocate its $7,582,000 of annual
manufacturing overhead. Of this amount, $2,270.000 is associated with the Large Bag line, $3,411,000 is associated with the Medium Bag line, and $1,901,000 is associated wil
the Small Bag line. Cooper's Bags Company is currently running a total of 30,000 machine hours: 13,600 in the Large Bag line, 15,800 in the Medium Bag line, and 9,600 in the
Small Bag line. Cooper's Bags Company uses machine hours as the cost driver for manufacturing overhead costs.
Which product line(s) have been overcosted or undercosted by using the plantwide manufacturing overhead rate?
(DC)
OA. Large Bags has been overcosted: Medium and Small have been undercosted.
OB. Large, Medium, and Small Bags have all been undercosted.
OC. Large, Medium, and Small Bags have all been overcosted.
OD. Large Bags has been undercosted; Medium and Small have been overcosted.
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