Which of the following companies would be most likely to use a job-order costing

Question

Which of the following companies would be most likely to use a job-order costing system rather than a process costing system? A. Fast food restaurant B. Shipbuilding C. Crude oil refining D. Candy making The manufacturing operation that would be most likely to use a job-order costing system is: A. toy manufacturing. B. candy manufacturing. C. crude oil refining. D. shipbuilding. A process cost system is employed in those situations where: A. many different products, jobs, or batches of production are being produced each period. B. where manufacturing involves a single, homogeneous product that flows evenly through the product process on a continuous basis. C. a service is performed such as in a law firm or an accounting firm. D. full or absorption cost approach is not employed. What document is used to determine the actual amount of direct labor to record on a job cost sheet? Time ticket Payroll register Production order Wages payable account Which of the following is the correct formula to compute the predetermined overhead Rate? Estimated total units in the allocation base divided by estimated total manufacturing overhead Estimated total manufacturing overhead costs divided by estimated total units in the allocation Actual total manufacturing overhead costs divided by estimated total units in the allocation base. Estimated total manufacturing overhead costs divided by actual total units in the allocation base.

Explanation / Answer

1) B Shipbuilding

2) A is probably incorrect. Toys look like assembly line products (uniform)

B is probably incorrect. Candy looks like assembly line products (uniform)

C is incorrect. Barrels of oil are uniform, assembly line products

D is the best answer. Large ships are likely to be unique products

3) B  where manufacturing involves a single, homogeneous product that flows evenly through the production process on a continuous basis

4)Time Ticket

5) B

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