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Quizzes > Business & Finance > Finance & Economics

Job Cost Sheets Quiz: How Well Do You Know Production Cost Accounting?

Think You Can Ace Job Costing? Test Your Production Cost Accounting Skills

Difficulty: Moderate
2-5mins
Learning OutcomesCheat Sheet
Paper art illustration of job cost sheets and calculator for accounting quiz on golden yellow background

Use this quiz to learn what job cost sheets represent during production and how direct materials, labor, and overhead flow into each job. You'll get fast feedback to spot gaps before an exam, and if you want more, try a related practice in management accounting .

What is the primary purpose of a job cost sheet?
To record customer invoice payments.
To allocate overhead to departments.
To track the costs of a specific job.
To determine company-wide profitability.
A job cost sheet accumulates all direct materials, direct labor, and manufacturing overhead for a specific job, providing detailed cost information per job. It does not allocate overhead at the departmental level nor record customer invoices. By tracking costs per job, firms can determine job profitability and price their work appropriately.
Which of the following cost elements are recorded on a job cost sheet?
Manufacturing overhead and distribution costs.
Direct labor and administrative salaries.
Direct materials and selling expenses.
Direct materials, direct labor, and manufacturing overhead.
A job cost sheet captures the three manufacturing cost elements: direct materials, direct labor, and applied manufacturing overhead. Selling, administrative, and distribution costs are period expenses and not assigned to individual jobs. This structure allows management to see the complete product cost per job.
The job cost sheet functions as a subsidiary ledger for which general ledger control account?
Raw Materials Inventory.
Work in Process Inventory.
Finished Goods Inventory.
Manufacturing Overhead.
Each job cost sheet details costs that comprise the Work in Process (WIP) inventory. The sum of all individual job cost sheet balances equals the WIP control account balance in the general ledger. Raw Materials and Finished Goods have their own subsidiary records.
How is the predetermined overhead rate calculated?
Actual overhead divided by direct labor cost.
Budgeted selling expenses divided by number of units sold.
Estimated manufacturing overhead divided by estimated allocation base.
Actual manufacturing overhead divided by actual allocation base.
The predetermined overhead rate is based on budgeted (estimated) overhead costs and an estimated allocation base (e.g., machine hours or labor hours) to apply overhead consistently throughout the period. Using actual costs would defeat the purpose of forward-looking costing.
Direct labor costs are recorded on the job cost sheet when:
Employees submit time tickets charging hours to jobs.
Sales orders are processed.
Raw materials requisition slips are approved.
Factory utilities are paid.
Direct labor is traced to jobs through time tickets, which record the number of hours employees work on each specific job. When time tickets are approved, WIP Inventory is debited for direct labor. Materials requisition slips record materials, not labor, and utilities are part of overhead.
Under a job order costing system, which inventory account is debited as costs are incurred?
Finished Goods Inventory.
Work in Process Inventory.
Raw Materials Inventory.
Cost of Goods Sold.
As direct materials and direct labor are used, and overhead is applied, the Work in Process Inventory account is debited to accumulate the costs of jobs in production. Raw Materials is credited when materials are issued, and Finished Goods is debited upon completion.
What is the normal flow of inventory in a job order costing system?
Finished Goods ? Work in Process ? Raw Materials ? Cost of Goods Sold.
Work in Process ? Raw Materials ? Finished Goods ? Cost of Goods Sold.
Raw Materials ? Finished Goods ? Work in Process ? Cost of Goods Sold.
Raw Materials ? Work in Process ? Finished Goods ? Cost of Goods Sold.
Costs flow from Raw Materials to Work in Process as materials and labor are added, then to Finished Goods once jobs are complete, and finally to Cost of Goods Sold when products are sold. This sequential flow is fundamental to inventory accounting.
When direct materials are requisitioned for a job, the journal entry is:
Debit Work in Process Inventory; credit Raw Materials Inventory.
Debit Manufacturing Overhead; credit Raw Materials Inventory.
Debit Finished Goods Inventory; credit Raw Materials Inventory.
Debit Cost of Goods Sold; credit Raw Materials Inventory.
Direct materials are transferred from Raw Materials Inventory to Work in Process Inventory when requisitioned for production. The entry debits WIP and credits Raw Materials. Indirect materials are charged to Manufacturing Overhead.
Manufacturing overhead is applied to jobs using a predetermined rate primarily because:
It ensures no overhead variance occurs.
It simplifies direct materials tracking.
It is a legal requirement under GAAP.
Actual overhead costs are not known until period-end.
Since actual overhead costs are uncertain until the period ends, applying overhead based on a predetermined rate allows companies to assign overhead to jobs consistently throughout the period. It also aids budgeting and cost control.
To record direct labor costs incurred on a job, which journal entry is made?
Debit Manufacturing Overhead; credit Cash.
Debit Work in Process Inventory; credit Wages Payable.
Debit Wages Payable; credit Work in Process Inventory.
Debit Labor Expense; credit Wages Payable.
When employees work on a job, direct labor costs are debited to Work in Process Inventory and credited to Wages Payable (or Cash) when wages are earned. This properly allocates labor costs to production.
Which costing system uses job cost sheets to accumulate costs?
Job order costing.
Standard costing.
Process costing.
Throughput costing.
Job order costing tracks costs by individual job using job cost sheets, ideal for unique or custom products. Process costing, by contrast, accumulates costs by department or process for homogeneous products.
Which of the following is included in manufacturing overhead?
Direct materials.
Factory rent and indirect labor.
Direct labor.
Sales commissions.
Manufacturing overhead includes all factory-related costs except direct materials and direct labor, such as factory rent, utilities, and indirect labor. Sales commissions are period selling expenses.
Which of the following could serve as an allocation base for applying manufacturing overhead?
Sales revenue.
Cash balances.
Direct labor hours.
Number of customers served.
An allocation base should have a logical relationship to overhead costs; direct labor hours is a common choice. Sales revenue and cash balances bear no direct link to factory overhead.
When a job is completed under a job order costing system, the cost is transferred from Work in Process to:
Finished Goods Inventory.
Cost of Goods Sold.
Manufacturing Overhead.
Raw Materials Inventory.
Upon completion, a job's accumulated costs are moved from Work in Process Inventory to Finished Goods Inventory. They remain in Finished Goods until the product is sold.
The Raw Materials Inventory subsidiary ledger is controlled by which general ledger account?
Work in Process Inventory control account.
Finished Goods Inventory control account.
Manufacturing Overhead control account.
Raw Materials Inventory control account.
The Raw Materials Inventory subsidiary ledger tracks individual material items, and its total balance equals the Raw Materials Inventory control account in the general ledger. Other inventory accounts relate to WIP or Finished Goods.
If applied manufacturing overhead is less than actual overhead incurred, the overhead is said to be:
Fully applied.
Overapplied.
Deferred.
Underapplied.
Underapplied overhead occurs when the amount of overhead applied to Work in Process is less than the actual overhead costs incurred. Overapplied is the opposite situation.
A job has direct materials of $2,200, direct labor of $1,800, and uses 100 direct labor hours. If the predetermined overhead rate is $15 per direct labor hour, what is the total job cost?
$5,500
$3,500
$6,500
$4,600
Overhead applied equals 100 hours × $15 = $1,500. Total job cost = $2,200 + $1,800 + $1,500 = $5,500. This calculation combines all three cost elements.
Estimated manufacturing overhead is $360,000 and estimated machine hours are 12,000. What is the predetermined overhead rate per machine hour?
$25 per machine hour
$20 per machine hour
$40 per machine hour
$30 per machine hour
Predetermined overhead rate = Estimated MOH ($360,000) ÷ Estimated machine hours (12,000) = $30 per machine hour. This rate is used to apply MOH to jobs throughout the period.
Actual manufacturing overhead incurred is $80,000 while overhead applied to jobs is $75,000. What is true?
Overhead is underapplied by $5,000.
Overhead is overapplied by $5,000.
No variance exists.
Applied overhead equals actual.
Since actual MOH ($80,000) exceeds applied MOH ($75,000), overhead is underapplied by $5,000. Companies must adjust this variance either by writing it off or prorating it.
Which best describes normal costing?
Actual overhead and actual labor, but budgeted materials.
Budgeted materials, labor, and overhead.
Actual direct materials and labor, and applied overhead using a predetermined rate.
Actual materials and overhead, budgeted labor.
Normal costing uses actual costs for direct materials and direct labor, but applies manufacturing overhead based on a predetermined rate, avoiding the delay of waiting for actual overhead data.
A company overapplies overhead by $4,000 and closes the variance to Cost of Goods Sold. What is the effect on net income?
Net income increases by $4,000.
Net income decreases by $4,000.
Net income decreases by $8,000.
Net income is unaffected.
Overapplied overhead means too much cost was allocated to jobs. Closing the $4,000 overapplied overhead to COGS reduces COGS by $4,000, thereby increasing net income by $4,000.
If a company allocates overhead based on direct labor hours, estimated MOH of $375,000 and estimated labor hours of 25,000, the predetermined rate per hour is:
$20 per direct labor hour
$12 per direct labor hour
$15 per direct labor hour
$10 per direct labor hour
Predetermined overhead rate = $375,000 ÷ 25,000 hours = $15 per direct labor hour. This rate is multiplied by actual labor hours to apply overhead to jobs.
A job completed shows DM $10,000, DL $6,000, and MOH applied $8,000. Actual MOH incurred was $9,000. How much overhead variance exists?
Underapplied by $2,000.
Underapplied by $1,000.
Overapplied by $1,000.
No variance.
Applied MOH ($8,000) is less than actual MOH ($9,000), creating an underapplied overhead variance of $1,000. The variance must be closed out or prorated at period end.
How is underapplied overhead of $5,000 typically closed if prorated among WIP, FG, and COGS?
Debited entirely to Cost of Goods Sold.
Allocated proportionally to ending balances of WIP, FG, and COGS.
Credited to Raw Materials Inventory.
Credited to Sales Revenue.
Prorating underapplied overhead allocates the $5,000 variance to ending WIP, Finished Goods, and COGS based on their relative ending balances, matching expenses with inventory carrying amounts.
Which item is NOT recorded on a job cost sheet?
Selling and administrative expenses.
Direct materials costs.
Applied manufacturing overhead.
Direct labor costs.
Job cost sheets include only manufacturing costs: direct materials, direct labor, and applied overhead. Selling and administrative expenses are period costs and are not assigned to individual jobs.
When applied manufacturing overhead is recorded, which account is credited?
Work in Process Inventory.
Manufacturing Overhead control account.
Raw Materials Inventory.
Cost of Goods Sold.
Applying overhead to jobs involves debiting WIP and crediting the Manufacturing Overhead control account. This reduces the overhead pool and assigns costs to production.
Under actual costing, how are manufacturing overhead costs assigned to jobs?
Based on budgeted overhead and budgeted base.
Based on actual overhead costs and actual allocation base.
Based on budgeted overhead and actual base.
Not assigned until year-end.
Actual costing uses the actual overhead costs incurred and the actual amount of the allocation base (e.g., machine hours) to assign overhead to jobs. This can result in more volatile per-job costs.
Which is an example of a service industry job suitable for job costing?
Retail grocery sales.
Electricity distribution.
Legal case work for a law firm.
Gasoline pump-out.
A legal case is a unique service engagement, making it ideal for job costing, which tracks costs per individual project. Retail grocery and gasoline sales involve mass transactions and use different costing methods.
When both direct and indirect materials are requisitioned for production, which accounts are debited?
Cost of Goods Sold and Raw Materials Inventory.
Finished Goods and Manufacturing Overhead.
Work in Process Inventory and Manufacturing Overhead.
Raw Materials Inventory and Finished Goods.
Direct materials are debited to Work in Process, while indirect materials are debited to Manufacturing Overhead. Both credits are to Raw Materials Inventory control.
Calculate Cost of Goods Manufactured if beginning WIP is $5,000, ending WIP is $7,000, and total manufacturing costs added are $100,000.
$95,000
$107,000
$102,000
$98,000
Cost of Goods Manufactured = Beginning WIP ($5,000) + Manufacturing Costs ($100,000) - Ending WIP ($7,000) = $98,000. This formula measures costs of jobs completed during the period.
A job costing system is most appropriate for which type of production?
Sugar processing.
Custom furniture manufacturing.
Refined petroleum processing.
Cement batching.
Job costing is ideal for custom or unique products like custom furniture, where each job's costs are traced individually. Process industries like petroleum and sugar are better suited to process costing.
Why do companies use a predetermined overhead rate rather than actual overhead rates?
To exclude indirect labor costs from jobs.
To apply overhead consistently throughout the period without waiting for actual data.
Because GAAP prohibits actual rates.
To overstate cost of goods sold.
Predetermined rates allow companies to apply overhead uniformly during the period based on budgets, aiding planning and avoiding delays in cost assignment that waiting for actual overhead figures would cause.
A company uses departmental overhead rates. Assembly department budgeted overhead is $300,000 with 60,000 machine hours; Finishing department budgeted overhead is $150,000 with 15,000 machine hours. A job uses 200 machine hours in Assembly and 50 in Finishing. What is the total overhead applied?
$2,000
$1,200
$1,750
$1,500
Assembly rate = $300,000/60,000 = $5; Finishing rate = $150,000/15,000 = $10. Applied = (200×$5)+(50×$10) = $1,000+$500 = $1,500. Departmental rates improve cost accuracy.
Under the proration method for disposing of underapplied overhead, costs are allocated to ending WIP, FG, and COGS based on their ending balances because:
It eliminates all overhead variances.
It matches overhead costs to the inventory accounts that consumed those costs.
It records variances as revenue.
It increases net income artificially.
Proration allocates underapplied or overapplied overhead proportionally to the ending balances of WIP, FG, and COGS, matching the variance to the accounts that originally absorbed overhead. This ensures better inventory valuation.
Which statement best explains why overhead variances arise in a normal costing system?
Because direct materials costs are not tracked.
Because direct labor hours are estimated.
Because actual overhead costs differ from the budgeted costs used in the predetermined rate.
Because sales volume is unpredictable.
In normal costing, variances occur when actual manufacturing overhead costs differ from the estimates used to compute the predetermined overhead rate. This difference creates over- or underapplied overhead.
What is the primary benefit of using multiple predetermined overhead rates instead of a single plant-wide rate?
Greater accuracy by reflecting different cost behaviors in each department.
Elimination of overhead variances.
Simpler recordkeeping.
Compliance with external audit standards.
Multiple departmental rates capture differences in overhead consumption and cost drivers across departments, enhancing accuracy. A single plant-wide rate may distort costs if departments differ significantly.
A company adopts activity-based costing for jobs using two activities: setups at $100 per setup and running at $4 per machine-minute. Job X requires 3 setups and 500 machine-minutes, plus DM $5,000 and DL $2,000. What is the total cost of Job X?
$8,300
$10,300
$9,300
$7,300
Setup cost = 3×$100 = $300; Running cost = 500×$4 = $2,000. Total MOH = $2,300; DM + DL = $7,000; Total job cost = $7,000 + $2,300 = $9,300. ABC assigns costs on multiple drivers.
In a normal costing system, which costs are actual and which are applied?
Direct materials are applied; labor and overhead are actual.
All costs are applied.
All costs are actual.
Direct materials and direct labor are actual; manufacturing overhead is applied.
Normal costing uses actual costs for direct materials and direct labor, while manufacturing overhead is applied to jobs using a predetermined rate. This balances timeliness and accuracy.
When overtime premium is incurred for production workers, how should it be treated in a job costing system?
Charged entirely to direct labor.
Recorded as a selling expense.
Included in manufacturing overhead.
Expensed as a period cost.
Overtime premium is not directly traceable to a specific job and is treated as an indirect labor cost within manufacturing overhead. It is pooled with other overhead for allocation.
How should partially completed jobs be reported on the balance sheet at period-end?
Included in Work in Process Inventory at their job cost sheet balances.
Included in Raw Materials Inventory.
Transferred to Finished Goods.
Expensed as Cost of Goods Sold.
Partially completed jobs remain in Work in Process Inventory and are reported at the accumulated cost on their job cost sheets. Only completed jobs move to Finished Goods.
If a tariff increases the cost of imported direct materials, what immediate impact appears on job cost sheets?
Lower applied overhead.
No change until year-end.
Higher selling expenses.
Higher direct materials cost per job.
A tariff raises the purchase cost of direct materials, so when those materials are requisitioned, the job cost sheet reflects the increased direct materials cost immediately. Overhead and selling expenses are unaffected directly.
In a highly automated plant, which allocation base tends to yield more accurate overhead application?
Machine hours.
Number of workers.
Number of setups.
Direct labor hours.
When automation predominates, overhead costs correlate more closely with machine usage than with direct labor. Thus, machine hours serve as a better allocation base.
When actual manufacturing overhead is recorded, which account is debited?
Raw Materials Inventory.
Finished Goods Inventory.
Work in Process Inventory.
Manufacturing Overhead control account.
Actual overhead costs (utilities, depreciation, indirect labor) are debited to the Manufacturing Overhead control account when incurred. This account is later credited as overhead is applied.
Which is NOT a characteristic of activity-based costing (ABC) in job costing?
It assigns overhead based on activities.
It improves accuracy for complex operations.
It uses multiple cost drivers.
It assumes direct labor drives all overhead costs.
ABC recognizes that multiple activities drive overhead costs, not just direct labor. Assuming direct labor drives all overhead contradicts ABC principles.
Rework costs on a specific job are:
Excluded from cost calculations.
Included in that job's cost sheet.
Always treated as period expense.
Recorded in Selling and Administrative Expenses.
Costs of reworking a job to meet specifications are directly traceable to that job and are added to its job cost sheet. Normal spoilage is treated separately.
A company using job order costing adopts percentage-of-completion for long-term contracts. When should revenue and costs be recognized?
Equally over the contract term.
On a cash-received basis.
Based on the proportion of costs incurred to total estimated costs.
Only when the contract is completed.
Under percentage-of-completion, revenue and costs are recognized each period based on costs incurred relative to total estimated contract costs, reflecting performance to date.
When a specialized piece of equipment is purchased for a single job, how should its cost be accounted for?
Credited to Raw Materials Inventory.
Expensed immediately as a period cost.
Recorded entirely in manufacturing overhead.
Allocated to that job's cost sheet and depreciated based on its useful life.
A job-specific asset is capitalized and allocated to the job's cost sheet over its useful life via depreciation expense. This ensures the cost matches the benefits provided.
Under IFRS, which manufacturing overhead costs are capitalized as inventory?
Financial costs not directly related to production.
Selling and marketing expenses.
Costs directly attributable to bringing inventories to their present location and condition.
All period administrative costs.
IFRS requires capitalization of costs directly attributable to the production of inventory, including overheads necessary to bring the inventory to its present condition and location. Period and finance costs are generally expensed.
At year-end, a company has underapplied overhead of $12,000. Under the proration method, which accounts receive an increase?
Income Summary exclusively.
Raw Materials and Finished Goods only.
Selling and Administrative Expenses.
Ending balances of Work in Process, Finished Goods, and Cost of Goods Sold.
The proration method allocates underapplied overhead proportionally to the ending balances in WIP, FG, and COGS, adjusting their carrying amounts. This matches the variance to inventory that consumed overhead.
When valuing partially completed jobs under IFRS, which measurement basis is required?
Cost model, measuring at cost of materials, labor, and overhead incurred.
Net realizable value model.
Lower of cost or market.
Fair value model, adjusted to market prices.
IFRS mandates that inventory, including WIP, be measured at cost, which includes all expenditures to bring the inventory to its present location and condition. Fair value or NRV are for impairment.
For a consulting engagement using job order costing and percentage-of-completion, which cost recognition best matches revenue recognition?
Total budgeted cost spread evenly.
Estimated final contract cost only.
Cash received in advance.
Costs incurred to date relative to total estimated costs.
To match costs with revenue under percentage-of-completion, costs are recognized based on the proportion of actual costs incurred to total estimated project costs. This aligns cost recognition with work progress.
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Study Outcomes

  1. Understand job cost sheet components -

    Identify the key elements of during production job cost sheets and explain how they capture ongoing manufacturing costs.

  2. Analyze cost flows -

    Trace direct materials, direct labor, and overhead entries on job cost sheets to see how production cost accounting tracks expenses in real time.

  3. Apply job costing techniques -

    Use quiz scenarios to calculate work-in-process balances and allocate overhead accurately for individual jobs.

  4. Differentiate cost sheet examples -

    Compare various job cost sheet examples to determine the most effective format for different production environments.

  5. Evaluate accuracy of cost data -

    Spot common errors in job costing questions and learn corrective actions to ensure reliable accounting records.

  6. Interpret quiz feedback -

    Leverage results from the cost accounting quiz to reinforce concepts and build confidence for exams and professional applications.

Cheat Sheet

  1. Core Cost Components -

    During production job cost sheets represent the real-time accumulation of direct materials, direct labor, and applied manufacturing overhead using the formula: Total Cost = DM + DL + MOH (Per Horngren et al., 2020). Remember "D-L-M" as "Don't Leave Money" - a mnemonic to recall Direct, Labor, Manufacturing overhead.

  2. Real-Time Job Tracking -

    In production cost accounting, each entry on a job cost sheet captures costs as they occur, ensuring accuracy in job costing questions and quizzes alike (University of Illinois, ACCT 300). This live tracking helps highlight cost overruns early and sharpens your decision-making skills.

  3. Overhead Allocation Techniques -

    Job cost sheet examples often illustrate predetermined overhead rates, calculated as Estimated Overhead ÷ Estimated Activity Base, to apply MOH during production (CIMA Official). Practicing these allocation methods strengthens your grasp on cost accounting quiz scenarios and variance analysis.

  4. Variance Analysis Insights -

    Comparing actual costs on job cost sheets with standard costs uncovers favorable or unfavorable variances, vital for continuous improvement (Harvard Business Review, 2018). Use variance formulas (Actual - Standard) to diagnose cost drivers in your job costing questions.

  5. Hands-On Practice Examples -

    Reviewing diverse job cost sheet examples - from manufacturing to service industries - builds confidence and prepares you for real-world cost accounting quiz challenges (Journal of Cost Management, 2019). Try solving at least three practice sheets weekly to master during production job cost sheets represent applications.

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