Managerial Accounting Quiz: Job Costing
4 questions · exam conditions
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Job CostingQuestion 1 of 4

Custom Woodworks applies overhead at $18 per machine hour. Job #389 required 65 machine hours, $4,800 in direct materials, and $2,200 in direct labor. The job also required 12 hours of setup time (included in the 65 machine hours) that used specialized equipment costing an additional $240. How should the $240 be treated in determining the job cost?

Added to direct materials, making total job cost $8,410
Added to applied overhead, making total job cost $8,410
Included in the predetermined overhead rate, making total job cost $8,170
Treated as period cost, making total job cost $8,170
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Managerial Accounting Quiz

Managerial Accounting Quiz: Job Costing

Practice Job Costing in Managerial 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 Costing, giving you a quick way to practice the rules, question types, and explanations that matter most for Managerial 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

Custom Woodworks applies overhead at $18 per machine hour. Job #389 required 65 machine hours, $4,800 in direct materials, and $2,200 in direct labor. The job also required 12 hours of setup time (included in the 65 machine hours) that used specialized equipment costing an additional $240. How should the $240 be treated in determining the job cost?

  1. Added to direct materials, making total job cost $8,410
  2. Added to applied overhead, making total job cost $8,410
  3. Included in the predetermined overhead rate, making total job cost $8,170 (correct answer)
  4. Treated as period cost, making total job cost $8,170
Explanation: The $240 specialized equipment cost should already be included in the predetermined overhead rate of $18 per machine hour, as overhead rates are designed to capture all indirect costs. Basic job cost = $4,800 (DM) + $2,200 (DL) + (65 × $18) (OH) = $4,800 + $2,200 + $1,170 = $8,170. Choice A incorrectly adds the $240 as direct materials. Choice B incorrectly adds it to overhead. Choice D incorrectly treats it as period cost.

Question 2

Alpine Construction applies overhead based on machine hours. The predetermined overhead rate is $45 per machine hour. Job #892 used 180 machine hours and incurred $15,600 in direct labor costs and $28,400 in direct materials. If actual overhead for the period was $8,500 and actual machine hours were 185, what amount of overhead was applied to Job #892?

  1. $8,100 (correct answer)
  2. $8,325
  3. $8,500
  4. $8,925
Explanation: Applied overhead = Predetermined overhead rate × Actual machine hours used by the job = $45 × 180 hours = $8,100. The actual overhead incurred and total actual machine hours for the period are irrelevant for calculating overhead applied to this specific job. Choice B uses 185 hours instead of 180. Choice C uses the actual overhead amount. Choice D appears to use an incorrect rate calculation.

Question 3

Pacific Aerospace's Job #823 shows direct labor of $18,600 and applied overhead of $23,250. The predetermined overhead rate is 125% of direct labor cost. During final inspection, it was discovered that $1,200 of labor costs were incorrectly charged to this job and should be transferred to Job #824. What is the correct applied overhead for Job #823 after the adjustment?

  1. $21,750 (correct answer)
  2. $22,500
  3. $23,250
  4. $24,000
Explanation: Original direct labor = $18,600. After correction = $18,600 - $1,200 = $17,400. Correct applied overhead = 125% × $17,400 = $21,750. Choice B uses an incorrect rate calculation. Choice C keeps the original overhead amount without adjustment. Choice D appears to add rather than subtract the correction.

Question 4

Elite Manufacturing completed Job #678 with the following costs: direct materials $15,200, direct labor $8,400, applied overhead $12,600. Upon inspection, 15% of the units were found defective and required additional materials costing $950 and 18 labor hours at $35 per hour to rework. If overhead is applied at 150% of direct labor cost, what is the total cost of Job #678 after rework?

  1. $37,830
  2. $38,725 (correct answer)
  3. $39,670
  4. $40,615
Explanation: Original job cost = $15,200 + $8,400 + $12,600 = $36,200. Rework costs: additional materials $950, additional labor 18 × $35 = $630, additional overhead 150% × $630 = $945. Total rework cost = $950 + $630 + $945 = $2,525. Total job cost = $36,200 + $2,525 = $38,725. Choice A omits overhead on rework labor. Choice C and D add incorrect amounts.