Exercise 3: Job Order Costing - Different Bases in Charging Factory Overhead

Based on production volume:

Work in Process

Direct materials 75,000 Finished Goods 0

Direct labor 25,000

Factory overhead* 28,000

128,000

128,000

No. of units
*Factory overhead = 3,000 x ₱ 9.60 = ₱ 28,000

Based on materials cost:

Work in Process

Direct materials 75,000 Finished Goods 0

Direct labor 25,000

Factory overhead* 120,000

220,000

220,000

Direct materials cost

*Factory overhead = ₱ 75,000 x 160% = ₱ 120,000
Based on labor cost:

Work in Process

Direct materials 75,000 Finished Goods 0

Direct labor 25,000

Factory overhead* 10,000

 110,000

110,000

Direct labor
*Factory overhead = ₱ 25,000 x 40% = ₱ 10,000

Based on labor hours:

Work in Process

Direct materials 75,000 Finished Goods 0

Direct labor 25,000

Factory overhead* 8,000

108,000

108,000

Labor hours
*Factory overhead = 1,000 x ₱ 8.00 = ₱ 8,000

Based on machine hours:

Work in Process

Direct materials 75,000 Finished Goods 0

Direct labor 25,000

Factory overhead* 9,600

108,000

109,600

Machine hours
*Factory overhead = 600 x ₱ 16.00 = ₱ 9,600