CMA Study Group

Dear All,

please help me in solving below problem

thanks in advance


Baldwin Printing Company uses a job order costing system and applies overhead based on machine
hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following

Direct material costs $1,000

Direct labor costs          1,500
 
Actual overhead            1,980

Machine hours              450


The accountant calculated the inventory cost of this order to be $4.30 per unit. The annual budgeted overhead in dollars was
a.$577,500.
b $600,000.
c $645,000.
d $660,000.

-------------------------------------------
Krishan Kumar Agrawal
Accountant
Transport & Warehousing Gr Co
Nimbahera Rajasthan
India
-------------------------------------------

total cost of 1000 unit =4.3*1000=4300 $
overhead=4300$-1000$ DM - 1500$ DL =1800
overhead per hour =1800$/450 Hr consumed =4$ per hr
total overhead budgeted= 150000 hr * 4$=600000 $

-------------------------------------------
Mourad Omar Khalifa
Director/Manager
Banque Du Caire
Cairo
Egypt
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Original Message:
Sent: 10-03-2012 02:03 AM
From: Krishan Kumar Agrawal
Subject: Part-1 Questation

Dear All,

please help me in solving below problem

thanks in advance


Baldwin Printing Company uses a job order costing system and applies overhead based on machine
hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following

Direct material costs $1,000

Direct labor costs          1,500
 
Actual overhead            1,980

Machine hours              450


The accountant calculated the inventory cost of this order to be $4.30 per unit. The annual budgeted overhead in dollars was
a.$577,500.
b $600,000.
c $645,000.
d $660,000.

-------------------------------------------
Krishan Kumar Agrawal
Accountant
Transport & Warehousing Gr Co
Nimbahera Rajasthan
India
-------------------------------------------

Correct answer b. Baldwin's annual budgeted overhead is $600,000 calculated as follows.
Overhead cost per unit $4.30 - ($1,000 ÷ 1,000) - ($1,500 ÷ 1,000) = $1.80
Overhead hours per unit 450 ÷ 1,000 = .45 hr.
Overhead budget per unit $1.80 ÷ .45 = $4.00
Total overhead budget 150,000 x $4.00 = $600,000

-------------------------------------------
Patricia Abels CMA, CPA
Academic
The University of Findlay
Findlay OH
United States
-------------------------------------------






Original Message:
Sent: 10-03-2012 02:03 AM
From: Krishan Kumar Agrawal
Subject: Part-1 Questation

Dear All,

please help me in solving below problem

thanks in advance


Baldwin Printing Company uses a job order costing system and applies overhead based on machine
hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following

Direct material costs $1,000

Direct labor costs          1,500
 
Actual overhead            1,980

Machine hours              450


The accountant calculated the inventory cost of this order to be $4.30 per unit. The annual budgeted overhead in dollars was
a.$577,500.
b $600,000.
c $645,000.
d $660,000.

-------------------------------------------
Krishan Kumar Agrawal
Accountant
Transport & Warehousing Gr Co
Nimbahera Rajasthan
India
-------------------------------------------