While watching soccer, Vab estimated that his company, Time Management Associates, located in Boston, MA would have the following: total annual fixed overhead costs would amount to $27,000; estimated volume of production would be 2,500 units of product. Guglani Associates calculated a predetermined overhead rate that was used to allocate overhead costs to the products made during the year. As predicted, actual fixed overhead costs did amount to $27,000. However, actual volume of production amounted to 2,700 units of product. Based on this information alone:

Multiple Choice

• Products were undercosted during the year.

• The answer cannot be determined from the information provided.

• Products were costed accurately during the year.

• Products were overcosted during the year.