Practice Exercises Job Costing

Ex18A

1) Job order costing might be used by a

A) candy manufacturer.
B) crude oil refinery.
C) custom home builder.
D) cereal maker.

2) The system for assigning costs to unique cost objects is called

A) time costing.
B) process costing.
C) service costing.
D) job costing.

3) Which of the following would be appropriately costed using a process costing system?
A) Oil refining
B) A law firm managing individual legal cases
C) Assembly of individual aircraft by Bombardier
D) Movies produced by Lions Gate Entertainment

4) Which of these documents is used to accumulate the costs of a job?

A) Labour time record
B) Materials inventory requisition form
C) Job cost record
D) Bill of materials
5) Which of these documents substantiates the balance of the raw materials inventory account shown on
the company's balance sheet?
A) Raw materials records
B) Bill of materials
C) Materials requisition
D) Labour time record

6) Which of these documents informs the storeroom to send specific materials to the factory floor?
A) Receiving report
B) Bill of materials
C) Materials requisition
D) Purchase order

7) Job costing is most likely used in which of the following industries?

A) Chemicals
B) Food and beverage
C) Pharmaceuticals
D) Commercial building construction

8) Which of the following is an example of an industry that would use a process costing rather than a job
costing-system?
A) Boeing Jets
B) Coca-Cola
C) Centex Custom Homes
D) Snyder & Lewis, Attorneys at Law

9) Which of the following is most likely to use job order costing?

A) DuPont Chemical
B) Ashley Custom Furnishings
C) Exxon-Mobile (gasoline)
D) General Mills (cereal)

10) What type of product costing system would a manufacturer of plywood use?
A) Job costing
B) Process costing
C) Either job or process
D) Both job and process
Here are selected basic data for Garrett Company:

Estimated manufacturing overhead $240,000 Factory utilities $29,100

Estimated labour hours 35,000 Indirect labour $23,500
Actual direct labour hours 36,000 Sales commissions $53,700
Estimated direct labour cost $300,000 Factory rent $49,200
Actual direct labour cost $320,000 Factory property taxes $28,100
Factory depreciation $67,200 Indirect materials $33,000

11) If the Garrett Company allocates overhead based on direct labour cost, what are the total actual
manufacturing overhead costs?
A) $230,100
B) $173,600
C) $260,300
D) $283,800

12) If the Garrett Company allocates overhead based on direct labour cost, what is the predetermined
manufacturing overhead rate?
A) 94% of direct labour cost
B) 125% of direct labour cost
C) 75% of direct labour cost
D) 80% of direct labour cost

13) If the Garrett Company allocates manufacturing overhead based on direct labour cost, what are the
allocated manufacturing overhead costs?
A) $240,000
B) $256,000
C) $230,100
D) $400,000
Solutions
Answer: C
Multiple choice answer C, D, A, C, A, C, D, B, B, A ($67,200 + 29,100 +
23,500 + 49,200 + 28,100 + 33,000 = $230,100) D ($240,000/$300,000 = 80%) B
($240,000/300,000 = 80% × $320,000 = $256,000)