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    Question

    The cost which is not accumulated in a job order costing

    system is:
    A Direct Materials Correct Answer Incorrect Answer
    B Direct Labor Correct Answer Incorrect Answer
    C Factory Overhead Correct Answer Incorrect Answer
    D Administrative Overhead Correct Answer Incorrect Answer
    E All of the above are accumulated Correct Answer Incorrect Answer

    Solution

    Job order costing is used when products are made to order or are unique. It accumulates all manufacturing costs (Direct Materials, Direct Labor, and applied Factory Overhead) for each specific job. Administrative Overhead is a period cost, meaning it is not directly tied to the production of a specific job and is not included in the inventory valuation. It is expensed in the income statement in the period it is incurred.

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