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Cost Accounting 101 Practice Test: Basics of Job Costing
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Job costing, also known as project-based accounting or job order costing, is an accounting process that tracks the costs associated with individual tasks or jobs. It's used by businesses of all sizes, including construction, manufacturing, accounting companies, and law firms.  Job costing involves: Assigning job numbers to individual items of expenses and revenues Determining the cost of labor and materials for each job Using this information to create a quote for the customer  Job costing can help you answer questions like: How much does it cost to complete a project? How much does it... Show more
Cost Accounting 101 Practice Test: Basics of Job Costing
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25 Questions

1. When direct materials are requisitioned the ________ account is increased.
2. The budgeted direct-labor cost rate includes ________ in the calculation.
3. The cost allocation base
4. For externally reported inventory costs, the Work-in-Process Control account is increased (debited) by:
5. When actual indirect costs exceed allocated indirect costs, indirect costs have been underapplied.
6. One reason for using longer time periods to calculate indirect-cost rates is seasonal cost fluctuations.
7. The adjusted allocation approach yields the benefits of:
8. Job costing:
9. The cost driver of an indirect cost is often used as the cost-allocation base.
10. The approach often used when dealing with small amounts of underallocated or overallocated overhead is the ________ approach.
11. The cost-allocation base is a systematic way to link an indirect cost or group of indirect costs to cost objects.
12. Cost objects may be jobs, products, or customers.
13. Which of the following are reasons for using longer periods, such as a year, to calculate indirect cost rates.
14. A budgeted indirect-cost rate is computed for each cost pool using budgeted indirect costs and the budgeted quantity of the cost-allocation base.
15. Which of the following statements about actual costing and normal costing is true?
16. When using a normal costing system, manufacturing overhead is allocated using the ________ manufacturing overhead rate and the ________ quantity of the allocation base.
17. The ending balance in Work-in-Process Control represents the total costs of all jobs that have NOT yet been completed.
18. Direct costs of a cost object are costs related to a particular cost object that can be allocated to that cost object in an economically feasible (cost-effective) way.
19. Overallocated indirect costs occur when the allocated amount of indirect costs is greater than the amount incurred for that period.
20. The overhead accounts are closed or become zero at the end of each year.
21. The difference between actual costing and normal costing is:
22. The advantage of using normal costing instead of actual costing is:
23. ________ is the process of distributing indirect costs to products.
24. Which of the following includes both traced direct costs and allocated indirect costs?
25. The Salaries Payable Control account has underlying subsidiary ledgers.

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