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 1,400 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 $7,663,000 of annual manufacturing overhead. Of this amount, $2,150,000 is associated with the Large Bag line, $3,415,000 is associated with the Medium Bag line, and $2,098,000 s associated with the Small Bag line. Cooper's Bags Company is currently running a total of 38,000 machine hours: 13,900 in the Large Bag line, 16,300 in the Medium Bag line, and 7,800 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? O A. Large Bags has been overcosted; Medium and Small have been undercosted. O B. Large, Medium, and Small Bags have all been undercosted. OC. Large Bags has been undercosted; Medium and Small have been overcosted. O D. Large, Medium, and Small Bags have all 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 1,400 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 $7,663,000 of annual manufacturing overhead. Of this amount, $2,150,000 is associated with the Large Bag line, $3,415,000 is associated with the Medium Bag line, and $2,098,000 s associated with the Small Bag line. Cooper's Bags Company is currently running a total of 38,000 machine hours: 13,900 in the Large Bag line, 16,300 in the Medium Bag line, and 7,800 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? O A. Large Bags has been overcosted; Medium and Small have been undercosted. O B. Large, Medium, and Small Bags have all been undercosted. OC. Large Bags has been undercosted; Medium and Small have been overcosted. O D. Large, Medium, and Small Bags have all been overcosted.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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