5 Questions
In job-order costing, manufacturing overhead costs are:
Allocated to all jobs
Which of the following companies would likely use job-order costing?
Boeing (aircraft manufacturing)
When are direct material and direct labor costs charged to each job in job-order costing?
As work is performed
Job-order costing systems are used when:
Many different products are produced each period
In job-order costing, what type of costs are easily traceable to the final product and directly charged?
Direct materials and direct labor costs
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.
Test your knowledge of cost accounting basics with this quiz covering topics such as direct material cost, direct labor cost, manufacturing overhead, and job-order costing systems.
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