After reading Chapter 2 and reviewing the online videos, you should have a good understanding of job-order costing and its applications to manufacturing companies. In the book, you learn that job order costing can apply to service companies as well. Examples are given for "jobs" as well as applicable direct materials, direct labor, and overhead costs for a law firm and for a movie studio.

Think a bit about another service company that could or would utilize job-order costing. Give the class your example, and then provide at least two items of direct materials, two items of direct labor, and two overhead items that may be applicable to the job-order costing of that service industry. Please also provide an example of when a predetermined overhead rate might differ from an actual overhead rate in the context of that service industry and, in your example, would overhead be under or overapplied?