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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

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 $252,000 2,400 batches
Mixing measured by batches $115,000 3,680 batches
Packaging measured by units $76,000 1,900,000 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. The following information was gathered regarding Job 607:

# of units in the job = 5,300

# of units in each batch = 1,060

# 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. $1,007.60 overcosted

B. $950.94 undercosted

C. $56.66 overcosted

D. $57.69 undercosted

Please help me with this question. Thank you

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