Question 1

Large aircraft manufacturers normally use:
A) Job order costing.
B) Process costing.
C) Mixed costing.
D) Full costing.
E) Simple costing.

Accepted Answer

Large aircraft manufacturers typically produce each aircraft according to specific customer requirements, making each one unique. This suggests that job order costing is the most appropriate costing method for such manufacturers as it assigns direct costs (materials, labor, and overhead) to specific jobs (aircraft) based on their unique characteristics.

Question 2

A job cost sheet shows information about each of the following items except:
A) The direct labor costs assigned to the job.
B) The name of the customer.
C) The costs incurred by the marketing department in selling the job.
D) The overhead costs assigned to the job.
E) The direct materials costs assigned to the job.

Accepted Answer

A job cost sheet typically includes information about direct labor costs, overhead costs, and direct materials costs assigned to the job. However, it typically does not include information about the costs incurred by the marketing department in selling the job. The name of the customer may or may not be included on the job cost sheet, depending on the company's record-keeping practices.

Question 3

A company that makes which of the following types of products would best be suited for a job costing system?
A) Fruit juice
B) Swimming suits
C) Snack chips
D) Phone chargers
E) Custom jewelry

Accepted Answer

A job costing system is used for customized or unique products or services. Custom jewelry falls under this category and therefore would be best suited for a job costing system. The other products listed are more likely produced on a larger scale and would be better suited for a process costing system.

Question 4

A perpetual record of a raw materials item that records data on the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory, is called a(n):
A) Materials ledger card.
B) Materials requisition.
C) Purchase order.
D) Materials voucher.
E) Purchase ledger.

Accepted Answer

A perpetual record of a raw materials item that records data on the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory, is called a materials ledger card. Materials requisitions, purchase orders, materials vouchers, and purchase ledgers are all related to materials management, but do not provide the same level of detailed record-keeping as a materials ledger card.

Question 5

Job order production is also known as:
A) Mass production.
B) Process production.
C) Unit production.
D) Customized production.
E) Standard costing.

Accepted Answer

Job order production is also known as customized production because each product is made according to the individual specifications of the customer. This is in contrast to mass production or process production, where large quantities of identical products are produced. Unit production refers to producing one item at a time, which is similar to job order production but does not necessarily involve customization. Standard costing is a method of measuring costs for production, but it is not a type of production system.

Question 6

Omega Construction manufactures homes to customer specifications. It most likely uses:
A) Process costing.
B) Periodic costing.
C) Unique costing.
D) Job order costing.
E) Activity-based costing.

Accepted Answer

Omega Construction manufactures homes to customer specifications which are unique and require different resources to manufacture. Job order costing is the best cost accounting method to track costs for each specific project.

Question 7

The job order cost sheets used by Greene Company revealed the following:

Job No. 135 was completed during May and Jobs No. 134 and 135 were shipped to customers in May. What was the company's cost of goods sold for May and the balance of Work in Process inventory on May 31?
A) $3,200; $900.
B) $2,900; $1,200.
C) $1,200; $2,900.
D) $1,700; $1,200.
E) $4,100; $0.

Accepted Answer

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Question 8

A job order costing system would best fit the needs of a company that makes:
A) Shoes and apparel.
B) Paint.
C) Cement.
D) Custom machinery.
E) Pencils and erasers.

Accepted Answer

A job order costing system is appropriate for companies that produce unique or customized products such as custom machinery. This system tracks the costs of each individual job or project, allowing the company to accurately determine the cost of production for each order. This is necessary for companies like machinery manufacturers where costs can vary widely from one order to the next.

Question 9

The target cost for a job using job costing is calculated as:
A) direct costs + desired profit.
B) direct costs − desired profit.
C) expected selling price − direct costs.
D) expected selling price − desired profit.
E) expected selling price + desired profit.

Accepted Answer

The target cost for a job using job costing is the expected cost that can be incurred for the job in order to achieve the desired profit. It is calculated by subtracting the desired profit from the expected selling price. Therefore, the correct option is D) expected selling price - desired profit.

Question 10

A document in a job order costing system that is used to record the costs of producing a job is a(n):
A) Job cost sheet.
B) Job lot.
C) Finished goods summary.
D) Process cost system.
E) Units-of-production sheet.

Accepted Answer

A job cost sheet is used in a job order costing system to record the costs of producing a specific job. It includes information such as direct material, direct labor, and manufacturing overhead costs associated with the job.

Question 11

A type of production that yields customized products or services for each customer is called:
A) Customer orientation production.
B) Job order production.
C) Just-in-time production.
D) Job lot production.
E) Process production.

Accepted Answer

Job order production is a type of production that yields customized products or services for each customer. This type of production requires careful planning and coordination to ensure that each order is fulfilled according to the customer's specifications. It is common in industries such as printing, furniture, and custom-made clothing.

Question 12

Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of September, but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred. What is the total cost of the job when it is completed in October?
A) $16,000
B) $22,500
C) $37,000
D) $26,500
E) $32,000

Accepted Answer

September job costs: RM $2,500 + DL $4,000 + OH ($4,000 × 2) = $14,500
October job costs: RM $3,000 + DL $6,500 + OH ($6,500 × 2) = $22,500
Total costs: September $14,500 + October $22,500 = $37,000
Work in process contains the sum of the costs on job cost sheets for jobs that are not yet complete.

Question 13

A job order production system would be appropriate for a company that produces which one of the following items?
A) A landscaping design for a new hospital.
B) Seedlings for sale in a nursery.
C) Sacks of yard fertilizer.
D) Packets of flower seeds.
E) Small gardening tools, including rakes, shovels, and hoes.

Accepted Answer

A job order production system is suitable for customized, one-of-a-kind products or services, such as a unique landscaping design for a new hospital. This system is not typically used for mass-produced items like seedlings, fertilizer, flower seeds, or small gardening tools, which are better suited for a continuous or batch production system.

Question 14

The balance in the Work in Process Inventory at any point in time equals
A) the costs for jobs finished during the period but not yet sold.
B) the manufacturing cost of jobs ordered but not yet started into production.
C) the sum of the manufacturing costs for all jobs in process but not yet completed.
D) the manufacturing costs of all jobs started during the period, completed or not.
E) the sum of the materials, labor and overhead costs paid during the period.

Accepted Answer

Work in Process Inventory represents the manufacturing costs of all jobs that are in the process of being completed but have not yet been sold. Therefore, the balance in the Work in Process Inventory at any point in time equals the sum of the manufacturing costs for all jobs in process but not yet completed. Choices A, B, D, and E do not accurately reflect the concept of Work in Process Inventory.

Question 15

The Work in Process Inventory account of a manufacturing company has a $4,400 debit balance. The company applies overhead using direct labor cost. The cost sheet of the only job still in process shows direct material cost of $2,000 and direct labor cost of $800. Therefore, the company's predetermined overhead rate is:
A) 40% of direct labor cost.
B) 50% of direct labor cost.
C) 80% of direct labor cost.
D) 200% of direct labor cost.
E) 300% of direct labor cost.

Accepted Answer

WIP = DM + DL + OH
$4,400 = $2,000 + $800 + OH
OH = $1,600; OH rate = $1,600/$800 = 200%

Question 16

A job cost sheet includes:
A) Direct materials, direct labor, and operating costs.
B) Direct materials, estimated overhead, and administrative costs.
C) Direct labor, actual overhead, and selling costs.
D) Direct material, direct labor, and applied overhead.
E) Direct materials, direct labor, and selling costs.

Accepted Answer

A job cost sheet includes the direct materials, direct labor, and applied overhead for a specific job or project. This allows for the calculation of the total cost of a project and helps in making pricing and cost decisions.

Question 17

Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of September, but needed an additional $3,000 of direct materials in October and additional direct labor of $6,500 to finish the job. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost. What is the amount of job costs added to Work in Process Inventory during October?
A) $16,000
B) $22,500
C) $37,000
D) $26,500
E) $32,000

Accepted Answer

October job costs: RM $3,000 + DL $6,500 + OH ($6,500 × 2) = $22,500
Work in process contains the sum of the costs on job cost sheets for jobs that are not yet complete.

Question 18

The Work in Process Inventory account of a manufacturing company has a $3,200 debit balance. The company applies overhead using direct labor cost. The cost sheet of the only job still in process shows direct material cost of $1,400 and direct labor cost of $800. Therefore, the amount of applied overhead is:
A) $1,800.
B) $2,200.
C) $1,000.
D) $800.
E) $2,400.

Accepted Answer

WIP = DM + DL + OH
$3,200 = $1,400 + $800 + OH
OH = $3,200 − $1,400 − $800 = $1,000

Question 19

Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of September, but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred. What is the balance in the Work in Process account at the end of September relative to Job A3B?
A) $5,500
B) $11,500
C) $6,500
D) $9,500
E) $14,500

Accepted Answer

DM $2,500 + DL $4,000 + OH ($4,000 × 2) = WIP for Job A3B $14,500
Work in process contains the sum of the costs on job cost sheets for jobs that are not yet complete.

Question 20

The production activities for a customized product represent a(n):
A) Operation.
B) Job.
C) Unit.
D) Pool.
E) Process.

Accepted Answer

Customized products are typically made to order or in small quantities, which makes them more like jobs than operations or processes. Each product is unique and requires its own set of production activities, making it a job. Units and pools typically refer to groups of products or resources, while processes are more standardized and repeatable than custom products.

Quiz 2: Job Order Costing and Analysis

Large aircraft manufacturers normally use:

A job cost sheet shows information about each of the following items except:

A company that makes which of the following types of products would best be suited for a job costing system?

A perpetual record of a raw materials item that records data on the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory, is called a(n) :

Job order production is also known as:

Omega Construction manufactures homes to customer specifications. It most likely uses:

The job order cost sheets used by Greene Company revealed the following: Job No. 135 was completed during May and Jobs No. 134 and 135 were shipped to customers in May. What was the company's cost of goods sold for May and the balance of Work in Process inventory on May 31?

A job order costing system would best fit the needs of a company that makes:

The target cost for a job using job costing is calculated as:

A document in a job order costing system that is used to record the costs of producing a job is a(n) :

A type of production that yields customized products or services for each customer is called:

A job order production system would be appropriate for a company that produces which one of the following items?

The balance in the Work in Process Inventory at any point in time equals

A job cost sheet includes:

The production activities for a customized product represent a(n) :