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

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

$7,482,000

of annual manufacturing overhead. Of this amount,

$2,230,000

is associated with the Large Bag line,

$3,411,000

is associated with the Medium Bag line, and

$1,841,000

is associated with the Small Bag line. Cooper's Bags Company is currently running a total of

38,000

machine hours:

13,600

in the Large Bag line,

16,000

in the Medium Bag line, and

8,400

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?

A.

Large Bags has been undercosted; Medium and Small have been overcosted.

B.

Large Bags has been overcosted; Medium and Small have been undercosted.

C.

Large, Medium, and Small Bags have all been undercosted.

D.

Large, Medium, and Small Bags have all been overcosted.