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 Gwynnie 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
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 Gwynnie 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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 |
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 |
Gwynnie 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
|
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