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Job Order Costing Quiz

The document is a quiz focused on job order costing, covering key concepts such as cost allocation, industries that use this system, and the treatment of direct materials and overhead costs. It includes multiple-choice questions that test understanding of the characteristics and processes involved in job order costing. Topics include journal entries, authorization documents, and the calculation of predetermined overhead rates.

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khyzhirell028
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21 views3 pages

Job Order Costing Quiz

The document is a quiz focused on job order costing, covering key concepts such as cost allocation, industries that use this system, and the treatment of direct materials and overhead costs. It includes multiple-choice questions that test understanding of the characteristics and processes involved in job order costing. Topics include journal entries, authorization documents, and the calculation of predetermined overhead rates.

Uploaded by

khyzhirell028
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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QUIZ NO.

7 – JOB ORDER COSTING

1. What is the primary characteristic of a job order costing system?

A) It allocates costs to specific jobs or batches of products.

B) It averages costs across all units produced.

C) It assigns costs based on machine hours.

D) It applies costs uniformly across all departments.

2. Which of the following industries is most likely to use job order costing?

A) Fast food restaurants

B) Automobile manufacturing

C) Electricity generation

D) Grocery stores

3. In a job order costing system, direct materials are initially recorded as:

A) Work in Process Inventory.

B) Finished Goods Inventory.

C) Cost of Goods Sold.

D) Raw Materials Inventory.

4. Which of the following costs would typically be included in the manufacturing overhead of a job order
costing system?

A) Direct labor

B) Direct materials

C) Factory rent

D) Cost of goods sold

5. How are indirect costs allocated to jobs in a job order costing system?

A) Based on direct labor hours


B) Based on machine hours

C) Based on direct materials cost

D) Equally distributed across all jobs

6. Which of the following statements is true regarding job order costing?

A) It is used only in service industries.

B) It is most appropriate for continuous mass production.

C) It assigns costs to individual units of production.

D) It is not suitable for tracking costs of customized products.

7. In a job order costing system, what is the journal entry to record the issuance of direct materials to a
production job?

A) Debit Work in Process Inventory, credit Raw Materials Inventory

B) Debit Raw Materials Inventory, credit Work in Process Inventory

C) Debit Finished Goods Inventory, credit Work in Process Inventory

D) Debit Manufacturing Overhead, credit Work in Process Inventory

8. Which of the following documents is used to authorize the production of a specific job in a job order
costing system?

A) Purchase order

B) Sales invoice

C) Job cost sheet

D) Production schedule

9. What is the predetermined overhead rate formula used in job order costing?

A) Estimated total overhead / Estimated total direct labor hours

B) Actual total overhead / Actual total direct labor hours

C) Estimated total overhead / Estimated total machine hours

D) Actual total overhead / Estimated total direct labor hours


10. In job order costing, underapplied overhead occurs when:

A) Actual overhead costs exceed applied overhead costs.

B) Applied overhead costs exceed actual overhead costs.

C) Direct materials costs exceed direct labor costs.

D) Manufacturing overhead costs are not allocated to production jobs.

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