CASE ANALYSIS:JOB ORDER COSTING

The Fortune, Inc. has the following balances as of January 1, 2023

Materials =
P 4,900
Work in process 4,600
Finished goods 6,000

Details of the three (3) inventories are as follows:

Finished goods
Commodity of 2,000 units at P
= 3

Work in process - Job No. 101

Materials A – 200 units at P

= 5.00 = P= 1,000
Materials B – 175 units at P
= 4.00 = P= 700
Direct Labor – 290 hours at P= 5.00 = P
= 1,450
Factory overhead – 100% of direct labor costs = P
= 1,450

Materials

Material A – 600 units at P

= 5.00 = P 3,000
=
Material B – 350 units at P
= 4.00 = = 1,400
P
Indirect Material = 500.00
P

The transactions for the month of January 2019 are as follows:

1. Purchases for the month of January are as follows:

Material A – 600 units at P = 5.50

Material B – 800 units at P= 5.00
Indirect materials - P
= 700

2. Materials requisitioned and issued on a first in and first

out basis amounted to P
= 7,000.

Material A, 200 units (charged to Job 101)

Material B, 225 units (charged to Job 102)
Material B, 425 units (charged to Job 103)
Indirect materials amounted to P
= 1,000

3. Material B returned to vendors, 70 units at P= 5.00

4. Payroll during January amounted to P
= 10,300, of which P
= 2,000
is for Job 101; P= 4,000 is for Job 102, P= 2,000 is for Job
103 and P
= 2,300 as indirect labor.

Deductions are as follows:

SSS Premium - P 412

=
PHIC - = 225
P
Withholding taxes - = 1,050
P

5. Factory overhead is applied on the basis of 100% of direct

labor costs.
 6. Jobs completed during the month – Job 101 for 3,000 units of
Commodity X and Job 102 for 5,000 units of Commodity Y.
7. Sales during January on FIFO basis – 4,000 units of Commodity
X at P
= 6.00 per unit and 4,000 units of Commodity Y at P
= 4.00
per unit.
8. Cash collections from customers amounted to P= 35,000.
9. Recorded the following liabilities.

Factory overhead - P
= 4,800
Selling expenses - P
= 2,100
General expenses - P
= 1,500

10. Paid accounts at P

= 9,500 and payroll for P
= 8,500.