Chapter 2: Job Order Costing
2.1-1 Accounting firms, building contractors, and healthcare providers are companies that use job order costing.
Answer: True
Difficulty: 1
LO: 2-1
EOC Ref: S2-1
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
2.1-2 Process costing is used by companies that produce large numbers of identical units in a continuous
fashion.
Answer: True
Difficulty: 1
LO: 2-1
EOC Ref: S2-1
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
2.1-3 General Motors and Chevron are examples of companies that use process costing.
Answer: True
Difficulty: 1
LO: 2-1
EOC Ref: S2-1
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
2.1-4 Which of the following companies would NOT use job order costing?
A) A lawn maintenance company
B) A legal firm
C) An auto repair shop
D) A beverage manufacturer
Answer: D
Difficulty: 2
LO: 2-1
EOC Ref: E2-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
,2.1-5 Which of the following is an example of an industry that would use a process costing system rather than a
job order costing system?
A) Custom furniture manufacturer
B) Unique furniture accessories manufacturer
C) Paint manufacturer
D) Aircraft manufacturer
Answer: C
Difficulty: 2
LO: 2-1
EOC Ref: E2-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
2.1-6 Job order costing is most likely used in which of the following industries?
A) Pharmaceutical manufacturing
B) Textbook publishing
C) Chemical manufacturing
D) Food and beverage manufacturing
Answer: B
Difficulty: 2
LO: 2-1
EOC Ref: S2-1
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
2.1-7 Which of the following companies is most likely to use job order costing?
A) Swenson Mobil Oil Refinery
B) Hunter’s Custom Furniture Company
C) Oliver Chemical Company
D) Somody Cereal Company
Answer: B
Difficulty: 1
LO: 2-1
EOC Ref: S2-1
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
,2.1-8 Which of the following statements is INCORRECT?
A) A job order costing system is used by manufacturers of heterogeneous products.
B) A process costing system is used by manufacturers of homogeneous products.
C) A service firm would likely use a job order costing system.
D) A custom home manufacturer would likely use a process costing system.
Answer: D
Difficulty: 2
LO: 2-1
EOC Ref: E2-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Measurement
2.1-9 Which costing system would better account for a unique individual product?
A) Job order costing system
B) Product costing system
C) Process costing system
D) Variable costing system
Answer: A
Difficulty: 2
LO: 2-1
EOC Ref: E2-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
2.1-10 State whether each company below would be more likely to use a job costing system or a
process costing system:
a) ____________________ custom furniture manufacturer
b) ____________________ paint manufacturer
c) ____________________ carpet manufacturer
d) ____________________ concrete manufacturer
e) ____________________ home builder
Answer:
a) job costing
b) process costing
c) process costing
d) process costing
e) job costing
Difficulty: 1
LO: 2-1
EOC Ref: S2-1
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Measurement
, 2.1-11 State whether each company below would be more likely to use a job costing system or a process costing
system:
A) ____________________ soft drink bottler
B) ____________________ custom jewelry manufacturer
C) ____________________ legal firm
D) ____________________ printer
E) ____________________ cardboard box maker
Answer:
A) process costing
B) job costing
C) job costing
D) job costing
E) process costing
Difficulty: 1
LO: 2-1
EOC Ref: S2-1
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Measurement
2.1-1 Accounting firms, building contractors, and healthcare providers are companies that use job order costing.
Answer: True
Difficulty: 1
LO: 2-1
EOC Ref: S2-1
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
2.1-2 Process costing is used by companies that produce large numbers of identical units in a continuous
fashion.
Answer: True
Difficulty: 1
LO: 2-1
EOC Ref: S2-1
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
2.1-3 General Motors and Chevron are examples of companies that use process costing.
Answer: True
Difficulty: 1
LO: 2-1
EOC Ref: S2-1
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
2.1-4 Which of the following companies would NOT use job order costing?
A) A lawn maintenance company
B) A legal firm
C) An auto repair shop
D) A beverage manufacturer
Answer: D
Difficulty: 2
LO: 2-1
EOC Ref: E2-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
,2.1-5 Which of the following is an example of an industry that would use a process costing system rather than a
job order costing system?
A) Custom furniture manufacturer
B) Unique furniture accessories manufacturer
C) Paint manufacturer
D) Aircraft manufacturer
Answer: C
Difficulty: 2
LO: 2-1
EOC Ref: E2-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
2.1-6 Job order costing is most likely used in which of the following industries?
A) Pharmaceutical manufacturing
B) Textbook publishing
C) Chemical manufacturing
D) Food and beverage manufacturing
Answer: B
Difficulty: 2
LO: 2-1
EOC Ref: S2-1
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
2.1-7 Which of the following companies is most likely to use job order costing?
A) Swenson Mobil Oil Refinery
B) Hunter’s Custom Furniture Company
C) Oliver Chemical Company
D) Somody Cereal Company
Answer: B
Difficulty: 1
LO: 2-1
EOC Ref: S2-1
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
,2.1-8 Which of the following statements is INCORRECT?
A) A job order costing system is used by manufacturers of heterogeneous products.
B) A process costing system is used by manufacturers of homogeneous products.
C) A service firm would likely use a job order costing system.
D) A custom home manufacturer would likely use a process costing system.
Answer: D
Difficulty: 2
LO: 2-1
EOC Ref: E2-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Measurement
2.1-9 Which costing system would better account for a unique individual product?
A) Job order costing system
B) Product costing system
C) Process costing system
D) Variable costing system
Answer: A
Difficulty: 2
LO: 2-1
EOC Ref: E2-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Reporting
2.1-10 State whether each company below would be more likely to use a job costing system or a
process costing system:
a) ____________________ custom furniture manufacturer
b) ____________________ paint manufacturer
c) ____________________ carpet manufacturer
d) ____________________ concrete manufacturer
e) ____________________ home builder
Answer:
a) job costing
b) process costing
c) process costing
d) process costing
e) job costing
Difficulty: 1
LO: 2-1
EOC Ref: S2-1
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Measurement
, 2.1-11 State whether each company below would be more likely to use a job costing system or a process costing
system:
A) ____________________ soft drink bottler
B) ____________________ custom jewelry manufacturer
C) ____________________ legal firm
D) ____________________ printer
E) ____________________ cardboard box maker
Answer:
A) process costing
B) job costing
C) job costing
D) job costing
E) process costing
Difficulty: 1
LO: 2-1
EOC Ref: S2-1
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Critical Thinking
AICPA Functional Competencies: Measurement
