Cost Accounting Quiz: Assigning Costs To Jobs
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Assigning Costs To JobsQuestion 1 of 20

Job #12 was completed with a total cost of $5,000. It was immediately sold to the customer on account for $7,500.

Which of the following journal entries correctly records the transfer of Job #12 from work in process to its next stage upon completion?

Debit Cost of Goods Sold $5,000; Credit Work in Process Inventory $5,000.
Debit Finished Goods Inventory $5,000; Credit Work in Process Inventory $5,000.
Debit Accounts Receivable $7,500; Credit Sales Revenue $7,500.
Debit Work in Process Inventory $5,000; Credit Raw Materials, Wages Payable, and MOH Applied $5,000.
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Cost Accounting Quiz

Cost Accounting Quiz: Assigning Costs To Jobs

Practice Assigning Costs To Jobs in Cost Accounting with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Assigning Costs To Jobs, giving you a quick way to practice the rules, question types, and explanations that matter most for Cost Accounting.

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

Job #12 was completed with a total cost of $5,000. It was immediately sold to the customer on account for $7,500.

Which of the following journal entries correctly records the transfer of Job #12 from work in process to its next stage upon completion?

  1. Debit Cost of Goods Sold $5,000; Credit Work in Process Inventory $5,000.
  2. Debit Finished Goods Inventory $5,000; Credit Work in Process Inventory $5,000. (correct answer)
  3. Debit Accounts Receivable $7,500; Credit Sales Revenue $7,500.
  4. Debit Work in Process Inventory $5,000; Credit Raw Materials, Wages Payable, and MOH Applied $5,000.
Explanation: The question asks for the entry upon completion of the job, which signifies its transfer from the factory floor (Work in Process) to the warehouse (Finished Goods). The entry to record the sale happens subsequently. Therefore, the correct entry is a debit to Finished Goods Inventory and a credit to Work in Process Inventory for the total cost of the job.

Question 2

A product, Job #Alpha, is processed through two sequential departments. In Department 1 (Molding), it incurred $2,000 in direct materials and $800 in direct labor. Overhead in Dept. 1 is applied at 150% of direct labor cost. The job was then transferred to Department 2 (Finishing). In Dept. 2, it incurred an additional $600 in direct labor, and overhead was applied at a rate of $30 per machine hour for the 20 hours it spent in the department.

What is the total manufacturing cost of Job #Alpha upon its completion?

  1. $4,000
  2. $1,200
  3. $5,200 (correct answer)
  4. $4,600
Explanation: The total cost is the sum of costs from Department 1 plus the additional costs incurred in Department 2.
  1. Cost from Dept. 1:
    • DM: $2,000
    • DL: $800
    • OH: 1.50 * $800 = $1,200
    • Total from Dept. 1 = $2,000 + $800 + $1,200 = $4,000.
  2. Costs added in Dept. 2:
    • DL: $600
    • OH: 20 machine hours * $30/hour = $600
    • Total added in Dept. 2 = $600 + $600 = $1,200.
  3. Total Job Cost = Cost from Dept. 1 (Transferred-in Cost) + Costs added in Dept. 2 = $4,000 + $1,200 = $5,200.

Question 3

The job cost sheet for Job #777, the only job in process at the end of the month, shows a total cost of $35,000. Direct materials charged to the job were $11,000, and direct labor was 500 hours at a rate of $24 per hour. The company applies manufacturing overhead on the basis of direct labor hours.

What is the company's predetermined overhead rate per direct labor hour?

  1. $22.00 per DLH
  2. $48.00 per DLH
  3. $24.00 per DLH (correct answer)
  4. $12.00 per DLH
Explanation: This problem requires working backward from the total job cost to find the applied overhead, and then calculating the rate.
  1. Calculate Direct Labor Cost = 500 hours * $24/hour = $12,000.
  2. Calculate Applied Overhead = Total Job Cost - Direct Materials - Direct Labor = $35,000 - $11,000 - $12,000 = $12,000.
  3. Calculate Overhead Rate = Applied Overhead / Activity Base = $12,000 / 500 direct labor hours = $24.00 per direct labor hour. The fact that the OH rate is the same as the labor wage rate is a coincidence designed to be a distractor.

Question 4

A custom cabinet job (Job #3C) incurred costs of $2,500. During final inspection, a flaw was discovered that rendered the cabinet unsellable. The cost of this spoiled unit is considered abnormal because it resulted from an employee's gross negligence. The cabinet has a disposal value of $100.

How does the spoilage of Job #3C affect the total cost recorded for that specific job?

  1. The job cost remains $2,500, and a loss of $2,400 is recognized. (correct answer)
  2. The job cost is reduced to $100, its disposal value.
  3. The job cost is reduced by the loss of $2,400.
  4. The job cost remains $2,500, and $2,500 is charged to Manufacturing Overhead.
Explanation: Abnormal spoilage is not considered a normal cost of production and is not included in the cost of good units or charged to Manufacturing Overhead. Instead, it is treated as a period expense (a loss). The cost of the job ($2,500) is removed from Work in Process, and a loss equal to the net cost (Cost - Disposal Value = $2,500 - $100 = $2,400) is recognized. The cost assigned to the job itself does not change, but it is ultimately written off as a loss.

Question 5

A consulting firm applies overhead to client jobs at 125% of direct professional labor cost. For a particular audit engagement, the total conversion cost was recorded as $90,000. Direct materials costs for the engagement were negligible.

What was the amount of direct professional labor cost assigned to this engagement?

  1. $72,000
  2. $90,000
  3. $50,000
  4. $40,000 (correct answer)
Explanation: This problem requires using the definition of conversion cost and the overhead rate to solve for direct labor.
  1. Conversion Cost = Direct Labor (DL) + Manufacturing Overhead (MOH). So, DL + MOH = $90,000.
  2. We also know that MOH = 1.25 * DL.
  3. Substitute the second equation into the first: DL + (1.25 * DL) = $90,000.
  4. Simplify and solve for DL: 2.25 * DL = $90,000.
  5. DL = $90,000 / 2.25 = $40,000.

Question 6

A boat manufacturer is building a custom yacht, Job #Y-01. A special type of teak wood was purchased specifically for this job from an overseas supplier. The supplier's invoice was for $25,000. Additional costs incurred were $1,500 for international shipping (freight-in) and $500 for import duties. The company's policy is to treat all costs necessary to acquire direct materials as part of the direct material cost.

What is the total direct material cost that should be assigned to Job #Y-01 from this purchase?

  1. $25,000
  2. $26,500
  3. $25,500
  4. $27,000 (correct answer)
Explanation: The cost of direct materials should include all costs required to get the materials into a condition and location ready for use. This includes the invoice price, freight-in, and any applicable taxes or duties. Based on the company's policy, all these costs are part of the direct material cost for the job. Total Direct Material Cost = Invoice Price + Freight-in + Import Duties = $25,000 + $1,500 + $500 = $27,000.

Question 7

The total manufacturing cost assigned to Job #215 was $48,000. The company applies manufacturing overhead at a rate of 150% of direct labor cost. The job was charged with $12,000 in direct labor cost.

What was the amount of direct materials cost assigned to Job #215?

  1. $18,000 (correct answer)
  2. $30,000
  3. $24,000
  4. $12,000
Explanation: The problem requires solving for the direct materials cost using the total cost equation.
  1. Total Cost = DM + DL + Applied OH.
  2. Given: Total Cost = $48,000; DL = $12,000.
  3. Calculate Applied OH = 150% of DL Cost = 1.50 * $12,000 = $18,000.
  4. Rearrange the formula to solve for DM: DM = Total Cost - DL - Applied OH.
  5. DM = $48,000 - $12,000 - $18,000 = $18,000.

Question 8

At the beginning of the month, the job cost sheet for Job #410 showed a balance of $8,500. During the month, the job incurred an additional $4,000 in direct material costs and 200 hours of direct labor at a rate of $22 per hour. Manufacturing overhead was applied at a rate of $10 per direct labor hour. The job was not completed by the end of the month.

What is the balance on the job cost sheet for Job #410 at the end of the month?

  1. $10,400
  2. $6,400
  3. $14,900
  4. $18,900 (correct answer)
Explanation: The ending balance of a job still in process is the sum of its beginning balance and all costs added during the period.
  1. Beginning Balance = $8,500.
  2. Direct Materials Added = $4,000.
  3. Direct Labor Added = 200 hours * $22/hour = $4,400.
  4. Overhead Applied = 200 direct labor-hours * $10/hour = $2,000.
  5. Ending Balance = $8,500 + $4,000 + $4,400 + $2,000 = $18,900.

Question 9

A manufacturing company uses a job-order costing system. For Job #B-52, the following costs were incurred: direct materials requisitioned of $15,000, indirect materials of $2,000, direct labor of 400 hours at $25 per hour, and indirect labor of $3,000. The company applies manufacturing overhead to jobs at a rate of 120% of direct labor cost.

What is the total manufacturing cost assigned to Job #B-52?

  1. $25,000
  2. $37,000 (correct answer)
  3. $39,000
  4. $45,600
Explanation: The total manufacturing cost of a job consists of its direct materials, direct labor, and applied manufacturing overhead. Indirect costs are part of actual overhead, not assigned directly to the job.
  1. Direct Materials = $15,000.
  2. Direct Labor = 400 hours * $25/hour = $10,000.
  3. Applied Manufacturing Overhead = 120% of Direct Labor Cost = 1.20 * $10,000 = $12,000.
  4. Total Job Cost = $15,000 (DM) + $10,000 (DL) + $12,000 (Applied OH) = $37,000.

Question 10

During production of Job #M-16, the production supervisor submitted a materials requisition for $7,000 of component parts and $500 of machine lubricants. Later, it was discovered that $800 of the component parts were not needed for the job and were returned to the storeroom.

What is the total direct materials cost that should be recorded on the job cost sheet for Job #M-16?

  1. $6,200 (correct answer)
  2. $6,700
  3. $7,000
  4. $7,500
Explanation: Direct materials cost for a job includes only the materials that are directly traceable to that job and are actually used. Component parts are direct materials, while machine lubricants are indirect materials (part of overhead). The cost of direct materials returned to the storeroom must be subtracted from the amount initially requisitioned. Direct Materials Cost = Initial Requisition - Returns = $7,000 - $800 = $6,200.

Question 11

A specialty furniture maker is producing a custom dining table (Job #C-88). The total cost incurred prior to inspection is $3,000. Upon inspection, it was discovered that a portion of the table was defective due to a machine malfunction. The cost to rework the defect was $400. Separately, the customer requested a change to the design, which resulted in $200 of rework costs.

What is the total cost that should be assigned to Job #C-88 after accounting for the rework?

  1. $3,000
  2. $3,200 (correct answer)
  3. $3,400
  4. $3,600
Explanation: Rework costs are treated differently based on their cause. Rework due to an internal failure (the machine malfunction) is charged to Manufacturing Overhead for all jobs to bear, not the specific job. Rework due to a customer-initiated change is charged directly to that specific job. Therefore, the job's cost is the original cost plus the cost of the customer-requested rework. Total Job Cost = $3,000 (Original Cost) + $200 (Customer Rework) = $3,200.

Question 12

For the year, Apex Manufacturing estimated total overhead costs of $500,000 and 25,000 total machine hours. In March, Job #M-03 was started and completed, consuming 120 machine hours. At the end of the year, actual total overhead was $520,000 and actual machine hours were 26,000.

What amount of manufacturing overhead was assigned to Job #M-03 during March?

  1. $2,400 (correct answer)
  2. $2,500
  3. $2,600
  4. $2,000
Explanation: Jobs are costed throughout the year using the predetermined overhead rate, which is based on estimated figures. The actual overhead and activity levels are used at year-end to reconcile the overhead account, not to re-cost individual jobs.
  1. Calculate the Predetermined Overhead Rate = Estimated Total Overhead / Estimated Activity Base = $500,000 / 25,000 machine hours = $20 per machine hour.
  2. Apply overhead to Job #M-03 = Rate * Actual Activity for the Job = $20/MH * 120 MH = $2,400.

Question 13

Alpha Corp. produces custom machinery and uses a job-order costing system with two production departments: Machining and Assembly. The predetermined overhead rate in Machining is $20 per machine-hour, and in Assembly, it is $15 per direct labor-hour. Job #77 passed through both departments. Data for Job #77 are as follows:

  • Machining: 50 machine-hours, 10 direct labor-hours
  • Assembly: 5 machine-hours, 40 direct labor-hours

What is the total amount of manufacturing overhead applied to Job #77?

  1. $1,600 (correct answer)
  2. $1,150
  3. $1,375
  4. $2,350
Explanation: Total manufacturing overhead is the sum of the overhead applied in each department, using each department's specific rate and activity base.
  1. Overhead applied in Machining = 50 machine-hours * $20/machine-hour = $1,000.
  2. Overhead applied in Assembly = 40 direct labor-hours * $15/direct labor-hour = $600.
  3. Total Applied Overhead = $1,000 + $600 = $1,600.

Question 14

An architecture firm uses a job-order costing system for its projects. For the 'Downtown Tower' project, costs were as follows: Senior Architect labor, $40,000; Junior Architect labor, $25,000; travel and blueprinting costs directly for the project, $8,000. Firm-wide administrative and support overhead is applied to projects at a rate of 60% of total direct professional labor cost.

What is the total cost assigned to the 'Downtown Tower' project?

  1. $73,000
  2. $112,000 (correct answer)
  3. $104,000
  4. $108,000
Explanation: In a service firm, total project cost includes direct professional labor, other direct costs, and applied overhead.
  1. Total Direct Professional Labor Cost = $40,000 (Senior) + $25,000 (Junior) = $65,000.
  2. Other Direct Costs = $8,000 (travel and blueprinting).
  3. Applied Overhead = 60% of Direct Labor Cost = 0.60 × $65,000 = $39,000.
  4. Total Project Cost = Direct Labor + Other Direct Costs + Applied Overhead = $65,000 + $8,000 + $39,000 = $112,000.

Question 15

A company currently applies overhead using a plantwide rate of $40 per direct labor-hour. It is considering a switch to a departmental rate system. For Job #K-10, the following data is available: it required 10 direct labor-hours in Department A and 5 direct labor-hours in Department B. The new proposed departmental overhead rates are $25 per direct labor-hour for Department A and $70 per direct labor-hour for Department B.

By how much would the total cost assigned to Job #K-10 change if the company switches to the departmental overhead rates?

  1. $0, no change (correct answer)
  2. $200 decrease
  3. $5 increase
  4. $0 increase
Explanation: This question requires calculating the applied overhead under both methods and comparing them. The change in total cost will equal the change in applied overhead, as direct materials and direct labor are unaffected.
  1. Overhead with Plantwide Rate: (10 DLH + 5 DLH) * $40/DLH = 15 DLH * $40/DLH = $600.
  2. Overhead with Departmental Rates:
    • Dept A: 10 DLH * $25/DLH = $250
    • Dept B: 5 DLH * $70/DLH = $350
    • Total = $250 + $350 = $600.
  3. Change = $600 (Departmental) - $600 (Plantwide) = $0. The cost assigned to this specific job does not change.

Question 16

A print shop completed Job #P-34. The job cost sheet shows direct materials of $1,200, direct labor of $1,800, and applied manufacturing overhead of $900. The company prices its jobs at a 40% markup on total manufacturing cost.

What is the selling price for Job #P-34?

  1. $1,560
  2. $3,900
  3. $4,200
  4. $5,460 (correct answer)
Explanation: The selling price is calculated by first determining the total manufacturing cost and then applying the markup percentage.
  1. Total Manufacturing Cost = Direct Materials + Direct Labor + Applied Overhead = $1,200 + $1,800 + $900 = $3,900.
  2. Markup Amount = Total Manufacturing Cost * Markup Percentage = $3,900 * 0.40 = $1,560.
  3. Selling Price = Total Manufacturing Cost + Markup Amount = $3,900 + $1,560 = $5,460.

Question 17

An employee, who earns a regular wage of $20 per hour and an overtime rate of $30 per hour, worked on Job #R-99. The overtime was required to meet a tight deadline specifically requested by this customer. The employee's time ticket shows 40 regular hours and 5 overtime hours were charged to Job #R-99.

What is the total direct labor cost that should be assigned to Job #R-99?

  1. $900
  2. $950 (correct answer)
  3. $850
  4. $800
Explanation: When overtime is incurred due to the specific requirements of a particular job (e.g., a customer rush order), the overtime premium is charged to that job as direct labor.
  1. Regular Pay = 40 hours * $20/hour = $800.
  2. Overtime Pay = 5 hours * $30/hour = $150.
  3. Total Direct Labor Cost = $800 + $150 = 950.Notethattheovertimepremium(950. Note that the overtime premium (10/hr * 5 hrs = $50) is included in the job cost because the overtime was job-specific.

Question 18

A custom fabrication job, #F-08, required 30 hours of work from a senior welder at $35 per hour and 50 hours from a junior fabricator at $20 per hour. The company applies manufacturing overhead at 75% of total direct labor cost. Direct materials for the job totaled $4,500.

What is the total manufacturing cost of Job #F-08?

  1. $7,587.50
  2. $8,037.50
  3. $8,087.50 (correct answer)
  4. $6,550.00
Explanation: The total cost requires summing direct materials, total direct labor from both categories, and the applied overhead based on that total labor cost.
  1. Direct Materials = $4,500.
  2. Direct Labor (Welder) = 30 hours * $35/hour = $1,050.
  3. Direct Labor (Fabricator) = 50 hours * $20/hour = $1,000.
  4. Total Direct Labor Cost = $1,050 + $1,000 = $2,050.
  5. Applied Overhead = 75% of Total Direct Labor = 0.75 * $2,050 = $1,537.50.
  6. Total Job Cost = $4,500 + $2,050 + $1,537.50 = $8,087.50.

Question 19

A company's records show that total manufacturing overhead applied during the year was $300,000. The predetermined overhead rate was calculated based on direct labor cost. Job #A-45, completed during the year, incurred $12,000 in direct materials and $15,000 in direct labor cost. The total direct labor cost for all jobs during the year was $250,000.

What is the total manufacturing cost of Job #A-45?

  1. $27,000
  2. $45,000 (correct answer)
  3. $39,000
  4. $43,000
Explanation: To find the job's total cost, we first need to determine the predetermined overhead rate. Then, we apply that rate to the job's direct labor cost and add all cost components.
  1. Calculate Predetermined Overhead Rate = Total Applied OH / Total Activity Base = $300,000 / $250,000 Direct Labor Cost = 120% of Direct Labor Cost.
  2. Apply Overhead to Job #A-45 = 120% * $15,000 (Job's DL Cost) = $18,000.
  3. Total Manufacturing Cost of Job #A-45 = DM + DL + Applied OH = $12,000 + $15,000 + $18,000 = $45,000.

Question 20

A direct laborer working on Job #A-12 earns $24 per hour. During an 8-hour shift, an unexpected power outage caused all machinery to stop for 1.5 hours. For the entire shift, the company's policy considers 0.5 hours to be normal idle time for breaks and personal needs, which is included in the predetermined overhead rate.

How should the labor cost for the 2 hours of total idle time (1.5 for outage, 0.5 for breaks) be allocated?

  1. $48 charged to Job #A-12 as direct labor.
  2. $48 charged to Manufacturing Overhead.
  3. $12 charged to Manufacturing Overhead; $36 charged as a separate period loss. (correct answer)
  4. $36 charged to Job #A-12; $12 charged to Manufacturing Overhead.
Explanation: Normal idle time (breaks) is an expected cost of production and is properly included in Manufacturing Overhead. Abnormal idle time (unexpected breakdowns, outages) is not a normal production cost and is treated as a period loss. Neither is charged directly to a specific job.
  1. Normal Idle Time Cost = 0.5 hours * $24/hour = $12. This is charged to Manufacturing Overhead.
  2. Abnormal Idle Time Cost = 1.5 hours * $24/hour = $36. This is charged to a period loss account (e.g., 'Loss from Power Outage').