What would the allocated cost for all overhead costs for job 607 be Gwynnie Pie

ID: 2414827 • Letter: W

Question

What would the allocated cost for all overhead costs for job 607 be

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 Material handling measured by $252,000 batches Mixing measured by batches $111,000 Packaging measured by units $86,000 Maintenance measured by # of $15,000 setups Estimated Overhead Costs Estimated Activity 2,400 batches 2,950 batches 2,150,000 units 260 setups

Explanation / Answer

Total O/H for Job #607 :-

Material Handling (252000/2400 batches) * 5 batches

525

Mixing (111000/2960 batches) * 5 batches

187.5

Packaging (86000/2150000 units) * 5500 units

220

Maintainance (15000/260 setups) * 1 setup

57.69

Total O/H for Job #607

990.19

*No of Baches required for Job #607 = 5500/100 = 5 batches

Option C is correct