Cost Accounting Quiz: Job Order Costing Entries
20 questions · exam conditions
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Job Order Costing EntriesQuestion 1 of 20

Vanguard Fabricators completed Job #775, which had a total manufacturing cost of $42,000. The job was sold on account to a customer for $65,000. Which journal entry correctly records the cost portion of this sale?

Debit Accounts Receivable $65,000; Credit Sales Revenue $65,000.
Debit Cost of Goods Sold $42,000; Credit Finished Goods Inventory $42,000.
Debit Cost of Goods Sold $42,000; Credit Work-in-Process Inventory $42,000.
Debit Finished Goods Inventory $42,000; Credit Cost of Goods Sold $42,000.
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Cost Accounting Quiz

Cost Accounting Quiz: Job Order Costing Entries

Practice Job Order Costing Entries 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 Job Order Costing Entries, 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

Vanguard Fabricators completed Job #775, which had a total manufacturing cost of $42,000. The job was sold on account to a customer for $65,000. Which journal entry correctly records the cost portion of this sale?

  1. Debit Accounts Receivable $65,000; Credit Sales Revenue $65,000.
  2. Debit Cost of Goods Sold $42,000; Credit Finished Goods Inventory $42,000. (correct answer)
  3. Debit Cost of Goods Sold $42,000; Credit Work-in-Process Inventory $42,000.
  4. Debit Finished Goods Inventory $42,000; Credit Cost of Goods Sold $42,000.
Explanation: The sale of a finished product requires two journal entries: one to record the revenue and receivable, and another to record the cost of the sale. The question specifically asks for the entry related to the cost. This entry transfers the cost of the item from the balance sheet (Finished Goods Inventory) to the income statement (Cost of Goods Sold). The correct entry is a debit to Cost of Goods Sold and a credit to Finished Goods Inventory for the manufacturing cost of the job, which is $42,000.

Question 2

When a manufacturing company uses direct materials for a specific job, what is the net effect of the corresponding journal entry on the company's total assets?

  1. Total assets increase.
  2. Total assets decrease.
  3. Total assets remain unchanged. (correct answer)
  4. Total assets and total liabilities both decrease.
Explanation: The journal entry to record the use of direct materials is a debit to Work-in-Process Inventory and a credit to Raw Materials Inventory. Both of these accounts are asset accounts. The entry simply reclassifies the cost from one asset account (Raw Materials) to another asset account (Work-in-Process). Therefore, there is no change in the total assets of the company.

Question 3

Mountain Fabricators requisitioned materials for three jobs: Job 201 received $18,000 of aluminum sheets and $2,500 of specialty bolts; Job 202 received $25,000 of steel plates; Job 203 received $12,000 of copper wire. Additionally, $4,200 of general shop supplies and $1,800 of machine lubricants were requisitioned for factory-wide use. What is the total amount that should be debited to Work in Process for this materials requisition?

  1. $55,500
  2. $57,500 (correct answer)
  3. $61,500
  4. $63,500
Explanation: Only direct materials are debited to Work in Process. Job 201: $18,000 + $2,500 = $20,500; Job 202: $25,000; Job 203: $12,000. Total direct materials = 57,500.Theshopsupplies(57,500. The shop supplies (4,200) and machine lubricants ($1,800) are indirect materials debited to Manufacturing Overhead Control, not Work in Process. Choice A omits the specialty bolts for Job 201. Choice C includes the shop supplies. Choice D includes both indirect materials.

Question 4

During production of Job C14, materials costing $500 were found to be defective due to an internal failure. This spoilage is considered normal and the spoiled goods have no disposal value. The journal entry to account for this normal spoilage would be:

  1. Debit Loss from Spoilage $500; Credit Work-in-Process $500.
  2. Debit Finished Goods $500; Credit Work-in-Process $500.
  3. Debit Work-in-Process $500; Credit Raw Materials $500.
  4. Debit Manufacturing Overhead $500; Credit Work-in-Process $500. (correct answer)
Explanation: The cost of normal spoilage is considered an inherent cost of production and is therefore treated as a manufacturing overhead cost. The cost of the spoiled goods ($500) that has already been charged to the Work-in-Process account for Job C14 must be removed. This is accomplished by crediting Work-in-Process. The cost is then transferred to Manufacturing Overhead by debiting that account. If the spoilage were abnormal, it would be charged to a loss account.

Question 5

At the end of its fiscal year, Meridian Industries had a $15,000 credit balance in its Manufacturing Overhead account. The company's controller has determined this amount is immaterial. The correct journal entry to close the Manufacturing Overhead account will result in:

  1. A $15,000 decrease to Cost of Goods Sold. (correct answer)
  2. A $15,000 increase to Cost of Goods Sold.
  3. A $15,000 increase to Work-in-Process Inventory.
  4. A $15,000 decrease to Net Income.
Explanation: A credit balance in the Manufacturing Overhead account indicates that overhead was overapplied (more overhead was applied to jobs than was actually incurred). To close this account, a debit is made to Manufacturing Overhead for $15,000. When the amount is immaterial, the corresponding credit is made to Cost of Goods Sold. A credit to Cost of Goods Sold decreases its balance, which in turn increases gross profit and net income.

Question 6

A summary of the factory time tickets for Cobalt Co. for May shows total direct labor costs of $150,000 and total indirect labor costs of $45,000. These wages will be paid in the next pay period. Which of the following is a component of the summary journal entry to record these labor costs?

  1. A debit to Work-in-Process for $195,000.
  2. A debit to Manufacturing Overhead for $150,000.
  3. A credit to Wages Payable for $195,000. (correct answer)
  4. A credit to Work-in-Process for $150,000.
Explanation: The summary journal entry to record factory labor costs involves debiting Work-in-Process for direct labor (150,000),debitingManufacturingOverheadforindirectlabor(150,000), debiting Manufacturing Overhead for indirect labor (45,000), and crediting Wages Payable for the total amount earned by factory employees ($150,000 + $45,000 = $195,000). Therefore, a credit to Wages Payable for $195,000 is a correct component of the entry.

Question 7

Blackwood Inc. applies overhead based on machine hours. For the current year, estimated total overhead was $500,000 and estimated machine hours were 20,000. During June, Job 801 used 500 machine hours. Actual overhead costs for June were $40,000. The journal entry to apply overhead to Job 801 would include:

  1. A credit to Manufacturing Overhead for $12,500. (correct answer)
  2. A debit to Manufacturing Overhead for $12,500.
  3. A credit to Manufacturing Overhead for $40,000.
  4. A debit to Work-in-Process for $10,000.
Explanation: First, calculate the predetermined overhead rate (POHR): POHR = Estimated Total Overhead / Estimated Allocation Base = $500,000 / 20,000 machine hours = $25 per machine hour. Next, calculate the overhead applied to Job 801: Applied Overhead = POHR * Actual Machine Hours for Job = $25/hour * 500 hours = $12,500. The journal entry to apply overhead is a debit to Work-in-Process and a credit to Manufacturing Overhead. Therefore, the entry includes a credit to Manufacturing Overhead for $12,500.

Question 8

A company's predetermined overhead rate is 150% of direct material cost. Job 55A required $8,000 of direct materials and $10,000 of direct labor. During the period, the company also incurred $2,500 of depreciation on factory equipment and paid $4,000 for factory utilities. What is the amount of manufacturing overhead applied to Job 55A?

  1. $12,000 (correct answer)
  2. $15,000
  3. $6,500
  4. $18,500
Explanation: Manufacturing overhead is applied to a job using the predetermined overhead rate (POHR) and the actual amount of the allocation base used. The POHR is 150% of direct material cost. For Job 55A, the direct material cost was $8,000. Therefore, the applied overhead is 1.50 \times \8,000 = $12,000$. The information about direct labor cost and actual overhead costs (depreciation, utilities) is not relevant for calculating the amount of overhead applied to this specific job.

Question 9

Apex Manufacturing uses a job-order costing system. During March, the following transaction occurred: Materials Requisition #851 was issued for $22,000 of raw materials. This requisition included $18,500 of sheet metal for Job 407 and $3,500 of various lubricants for factory machinery. Which journal entry correctly records this transaction?

  1. Debit Work-in-Process Inventory for $22,000; Credit Raw Materials Inventory for $22,000.
  2. Debit Work-in-Process Inventory for $18,500; Debit Manufacturing Overhead for $3,500; Credit Raw Materials Inventory for $22,000. (correct answer)
  3. Debit Work-in-Process Inventory for $18,500; Debit Factory Supplies Expense for $3,500; Credit Accounts Payable for $22,000.
  4. Debit Work-in-Process Inventory for $18,500; Debit Manufacturing Overhead for $3,500; Credit Accounts Payable for $22,000.
Explanation: The journal entry must distinguish between direct and indirect materials. The sheet metal (18,500)isadirectmaterial,traceabletoJob407,andisdebitedtoWork−in−ProcessInventory.Thelubricants(18,500) is a direct material, traceable to Job 407, and is debited to Work-in-Process Inventory. The lubricants (3,500) are indirect materials, used for general factory operations, and are debited to Manufacturing Overhead. The total amount ($22,000) represents a decrease in the Raw Materials Inventory account, which is credited.

Question 10

During January, Sterling Manufacturing incurred $85,000 in actual manufacturing overhead costs. During the same period, the company applied $80,000 of overhead to jobs in process. The journal entry to close the immaterial overhead balance to Cost of Goods Sold would include:

  1. A debit to Cost of Goods Sold for $5,000. (correct answer)
  2. A credit to Cost of Goods Sold for $5,000.
  3. A debit to Manufacturing Overhead for $80,000.
  4. A credit to Work-in-Process for $5,000.
Explanation: First, determine if overhead is under- or overapplied. Actual MOH (85,000)isgreaterthanAppliedMOH(85,000) is greater than Applied MOH (80,000), resulting in $5,000 of underapplied overhead. The Manufacturing Overhead account has a $5,000 debit balance. To close this account, Manufacturing Overhead must be credited for $5,000. To complete the entry, Cost of Goods Sold is debited for $5,000, which increases the Cost of Goods Sold for the period.

Question 11

At the end of a period, a company has three jobs with the following statuses and costs:

  • Job 1: Completed and sold, total cost $22,000
  • Job 2: Completed, not sold, total cost $15,000
  • Job 3: In process, costs to date $8,000

Based on this information, which journal entry must have been made during the period?

  1. A debit to Finished Goods for $37,000. (correct answer)
  2. A debit to Cost of Goods Sold for $37,000.
  3. A credit to Work-in-Process for $22,000.
  4. A credit to Finished Goods for $15,000.
Explanation: The journal entry to transfer completed jobs from production to the warehouse is a debit to Finished Goods and a credit to Work-in-Process. During this period, both Job 1 and Job 2 were completed. Therefore, their total costs must have been transferred out of WIP and into Finished Goods. The total cost of completed jobs is $22,000 (Job 1) + $15,000 (Job 2) = $37,000. The correct entry is Debit Finished Goods $37,000; Credit Work-in-Process $37,000. Option A reflects the debit portion of this entry.

Question 12

A journal entry includes a debit to Work-in-Process for $32,000 and a credit to Manufacturing Overhead for $32,000. The company's predetermined overhead rate is $16 per machine hour. What does this journal entry represent?

  1. The incurrence of $32,000 in actual overhead costs.
  2. The completion of a job with a total cost of $32,000.
  3. The application of overhead to production based on 2,000 machine hours. (correct answer)
  4. The closing of an underapplied overhead balance of $32,000.
Explanation: A debit to Work-in-Process and a credit to Manufacturing Overhead is the standard journal entry for applying overhead to jobs. The amount of overhead applied is calculated by multiplying the predetermined rate by the actual amount of the allocation base used. In this case, $32,000 (Applied MOH) / $16 per machine hour (POHR) = 2,000 machine hours. Therefore, the entry represents the application of overhead based on the usage of 2,000 machine hours.

Question 13

Falcon Industries incurred the following factory costs during April: indirect materials used $12,000; factory supervisor's salary $8,000; depreciation on factory building $15,000; and direct labor $50,000. What is the total debit to the Manufacturing Overhead account from these specific transactions?

  1. $85,000
  2. $35,000 (correct answer)
  3. $23,000
  4. $20,000
Explanation: The Manufacturing Overhead account is debited for all actual indirect manufacturing costs incurred. From the list provided, the indirect costs are: indirect materials (12,000),factorysupervisor′ssalary(12,000), factory supervisor's salary (8,000), and depreciation on the factory building (15,000).Directlabor(15,000). Direct labor (50,000) is a direct cost and is debited to the Work-in-Process account, not Manufacturing Overhead. The total debit to Manufacturing Overhead is $12,000 + $8,000 + $15,000 = $35,000.

Question 14

On May 1, a company purchased $100,000 of raw materials on account. On May 5, the production supervisor submitted a materials requisition for $40,000 of direct materials and $5,000 of indirect materials. The journal entry on May 5 would include:

  1. A credit to Accounts Payable for $45,000.
  2. A debit to Manufacturing Overhead for $40,000.
  3. A debit to Work-in-Process for $45,000.
  4. A credit to Raw Materials Inventory for $45,000. (correct answer)
Explanation: The question asks for the journal entry on May 5, which is the date the materials were requisitioned for use in production, not the date they were purchased. The purchase on May 1 is separate. The requisition of materials moves their cost out of Raw Materials Inventory. Direct materials (40,000)aredebitedtoWork−in−Process,andindirectmaterials(40,000) are debited to Work-in-Process, and indirect materials (5,000) are debited to Manufacturing Overhead. The total decrease in raw materials is $45,000, which is recorded as a credit to Raw Materials Inventory.

Question 15

Omega Systems applied $250,000 of manufacturing overhead during the year. At year-end, the Manufacturing Overhead account had a $15,000 credit balance before closing. What was the total amount of actual manufacturing overhead costs incurred during the year?

  1. $265,000
  2. $250,000
  3. $235,000 (correct answer)
  4. $15,000
Explanation: The balance in the Manufacturing Overhead account is the difference between actual overhead (debits) and applied overhead (credits). A credit balance means overhead was overapplied, so Applied MOH > Actual MOH. The formula is: Actual MOH - Applied MOH = Debit/(Credit) Balance. Let X be Actual MOH. Then, X - 250,000=(250,000 = (15,000). Solving for X gives: X = $250,000 - $15,000 = $235,000. So, the actual manufacturing overhead costs incurred were $235,000.

Question 16

A company's weekly payroll of $120,000 consisted of $75,000 for direct labor, $20,000 for indirect factory labor, and $25,000 for administrative salaries. The journal entry to record the distribution of this payroll would include a:

  1. Debit to Work-in-Process for $95,000.
  2. Debit to Manufacturing Overhead for $45,000.
  3. Credit to Wages Payable for $95,000.
  4. Debit to Work-in-Process for $75,000. (correct answer)
Explanation: The payroll distribution entry allocates the total payroll cost to the appropriate accounts. Direct labor (75,000)isaproductcosttraceddirectlytojobs,soitisdebitedtoWork−in−Process.Indirectfactorylabor(75,000) is a product cost traced directly to jobs, so it is debited to Work-in-Process. Indirect factory labor (20,000) is a product cost but not traceable to specific jobs, so it is debited to Manufacturing Overhead. Administrative salaries ($25,000) are a period cost and are debited to an expense account like Salaries and Wages Expense. The full entry would be: Debit WIP $75,000; Debit MOH $20,000; Debit Salaries and Wages Expense $25,000; Credit Wages Payable $120,000. Therefore, a debit to Work-in-Process for $75,000 is a correct component of this entry.

Question 17

Job 12 produced 1,000 identical units at a total cost of $8,500. The company sold 600 of these units on account. The journal entry to record the cost of goods sold for this transaction would include a:

  1. Debit to Cost of Goods Sold for $8,500.
  2. Credit to Finished Goods for $3,400.
  3. Debit to Cost of Goods Sold for $5,100. (correct answer)
  4. Credit to Work-in-Process for $5,100.
Explanation: First, calculate the cost per unit: Total Cost / Total Units = $8,500 / 1,000 units = $8.50 per unit. Next, calculate the cost of the units sold: Cost per Unit * Units Sold = $8.50 * 600 units = $5,100. The journal entry to record the cost of the sale is a debit to Cost of Goods Sold and a credit to Finished Goods Inventory. Therefore, the entry includes a debit to Cost of Goods Sold for $5,100.

Question 18

The Work-in-Process T-account for Rhino Corp. shows a debit for direct materials of $30,000 and a debit for direct labor of $45,000. The ending balance of the account is $15,000. If the only other entry to the account during the period was for applied overhead, and the cost of goods manufactured was $120,000, what was the journal entry to apply overhead?

  1. Debit Work-in-Process $60,000; Credit Manufacturing Overhead $60,000. (correct answer)
  2. Debit Work-in-Process $75,000; Credit Manufacturing Overhead $75,000.
  3. Debit Manufacturing Overhead $60,000; Credit Work-in-Process $60,000.
  4. Debit Work-in-Process $45,000; Credit Manufacturing Overhead $45,000.
Explanation: This problem requires using the WIP T-account formula: Beginning Balance + DM + DL + Applied MOH - Cost of Goods Manufactured = Ending Balance. We need to find the beginning balance first to solve for MOH. Wait, let's re-read. Let's use the structure: Total Debits - Total Credits = Ending Balance. The debits are Beg. Bal + DM + DL + MOH. The credit is COGM. Let's try: Beg. Bal. + $30,000 (DM) + $45,000 (DL) + Applied MOH = Total costs available. Then Total costs available - $120,000 (COGM) = $15,000 (End Bal). So, Total costs available = $135,000. Beg. Bal. + $75,000 + Applied MOH = 135,000.Thishastwounknowns.Let′srethink.Theentries∗to∗WIParedebits.Theentries∗out∗ofWIParecredits.Debits=DM(135,000. This has two unknowns. Let's rethink. The entries *to* WIP are debits. The entries *out* of WIP are credits. Debits = DM (30k) + DL (45k)+AppliedMOH.Credits=COGM(45k) + Applied MOH. Credits = COGM (120k). The change in the account is Debits - Credits. We have Beg Bal + (Debits - Credits) = End Bal. Let's try a different setup: Total costs added (DM + DL + MOH) = COGM + End WIP - Beg WIP. Still two unknowns. Let's re-read again. 'The ending balance ... is $15,000...the cost of goods manufactured was $120,000'. This means the total credits to WIP were 120,000.ThetotaldebitsmustequalBegBal+DM+DL+MOH.So:BegBal+(DM+DL+MOH)−COGM=EndBal.BegBal+(120,000. The total debits must equal Beg Bal + DM + DL + MOH. So: Beg Bal + (DM + DL + MOH) - COGM = End Bal. Beg Bal + (30k + $45k + MOH) - $120k = $15k. Still two unknowns. Is there a simpler way? Let's assume the question implies the account was opened during the period, so Beg Bal = $0. $0 + $30,000 + $45,000 + Applied MOH - $120,000 = $15,000. $75,000 + Applied MOH = $135,000. Applied MOH = $60,000. The journal entry to apply overhead is a debit to Work-in-Process and a credit to Manufacturing Overhead for $60,000.

Question 19

Coastal Industries completed Job 89 in April with total costs of $125,000. The job was immediately transferred to finished goods inventory. Later in April, the entire job was sold on account for $185,000. Which sequence of journal entries correctly records both the transfer to finished goods and the subsequent sale?

  1. Debit Finished Goods $125,000, Credit Work in Process $125,000; then Debit Cost of Goods Sold $125,000, Credit Finished Goods $125,000; then Debit Accounts Receivable $185,000, Credit Sales Revenue $185,000 (correct answer)
  2. Debit Finished Goods $185,000, Credit Work in Process $125,000, Credit Gross Profit $60,000; then Debit Accounts Receivable $185,000, Credit Finished Goods $185,000
  3. Debit Cost of Goods Sold $125,000, Credit Work in Process $125,000; then Debit Accounts Receivable $185,000, Credit Sales Revenue $185,000
  4. Debit Finished Goods $125,000, Credit Work in Process $125,000; then Debit Accounts Receivable $185,000, Credit Sales Revenue $125,000, Credit Gain on Sale $60,000
Explanation: Three separate journal entries are required: (1) Transfer completed job from WIP to Finished Goods at cost, (2) Record COGS when sold by transferring from Finished Goods to COGS at cost, and (3) Record the sale at selling price. Choice B incorrectly records gross profit as a direct credit and transfers at selling price rather than cost. Choice C skips the Finished Goods step entirely. Choice D incorrectly treats the markup as a gain rather than normal sales revenue.

Question 20

Pacific Electronics uses predetermined overhead rates by department. In Assembly, overhead is applied at $12 per direct labor hour, while in Testing, overhead is applied at 200% of direct labor cost. Job 445 required 120 direct labor hours at $18 per hour in Assembly and 40 direct labor hours at $25 per hour in Testing. What is the total manufacturing overhead applied to Job 445?

  1. $2,440
  2. $3,440 (correct answer)
  3. $4,320
  4. $6,760
Explanation: Assembly overhead: 120 hours × $12/hour = $1,440. Testing overhead: (40 hours × $25/hour) × 200% = $1,000 × 200% = $2,000. Total applied overhead = $1,440 + $2,000 = $3,440. Choice A incorrectly applies 200% to hours instead of labor cost in Testing: $1,440 + (40 × 200% × $12.50) = $2,440. Choice C applies the wrong rate to Testing: $1,440 + (40 × $72) = $4,320. Choice D adds total labor costs to overhead: $3,440 + $3,320 = $6,760.