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Questions and Answers
In job-order costing, manufacturing overhead costs are:
In job-order costing, manufacturing overhead costs are:
- Charged only to direct material costs
- Directly traced to each job
- Allocated to all jobs (correct)
- Not considered in cost allocation
Which of the following companies would likely use job-order costing?
Which of the following companies would likely use job-order costing?
- Amazon (online retail)
- Boeing (aircraft manufacturing) (correct)
- Apple Inc. (consumer electronics)
- McDonald's (fast food chain)
When are direct material and direct labor costs charged to each job in job-order costing?
When are direct material and direct labor costs charged to each job in job-order costing?
- Only if the customer requests it
- At the beginning of the production period
- At the end of the production period
- As work is performed (correct)
Job-order costing systems are used when:
Job-order costing systems are used when:
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In job-order costing, what type of costs are easily traceable to the final product and directly charged?
In job-order costing, what type of costs are easily traceable to the final product and directly charged?
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Study Notes
Job-Order Costing
- Manufacturing overhead costs are applied to jobs indirectly.
Companies Using Job-Order Costing
- Companies that produce custom or unique products, such as aerospace companies, shipbuilders, or construction companies.
Charging Direct Material and Labor Costs
- Direct material and direct labor costs are charged to each job when the materials are used and the labor is incurred.
Using Job-Order Costing Systems
- Job-order costing systems are used when each product or batch of products has unique features or requires different amounts of material, labor, or overhead.
Easily Traceable Costs
- Direct material and direct labor costs are easily traceable to the final product and directly charged to each job in job-order costing.
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