Job Order Cost System: Purpose, Pros & Cons

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question 1 of 3

Predetermined overhead for the ABC Company is calculated based on the number of machine hours. Calculate predetermined overhead given the following information: Total manufacturing overhead = $100,000; number of machine hours = 25,000; number of direct labor hours = 40,000.

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1. In a job order costing system, what is the order that goods are transferred through the conversion process?

2. At which stage of the manufacturing process would direct labor costs be applied?

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About This Quiz & Worksheet

See what you know about job order costing with these study resources. Included are quiz questions to test you on areas such as costing methods and how a manufacturing company knows the cost of a single unit.

Quiz & Worksheet Goals

This quiz and worksheet will help you to:

  • Assess the total production cost of an order
  • Identify an advantage of the job order costing system
  • Recognize disadvantages

Skills Practiced

The worksheet and quiz employ the following skills:

  • Interpreting information - verify that you can read information regarding the total production cost of an order and interpret it correctly
  • Information recall - access the knowledge you've gained regarding how a manufacturing company identifies the cost of making a single item
  • Knowledge application - use your knowledge to answer questions about the job order costing system

Additional Learning

Explore more about this area of study with the lesson entitled Job Order Costing System: Purpose, Pros & Cons. The lesson will adhere to the following study goals:

  • Explain a job costing system
  • Define unit cost
  • Identify the parts of a job cost sheet
  • Assess how a job cost system is used
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