Two Types of Cost Accounting Systems

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Sin Yi, Wong
Chapter 2 (17) Discussion questions. Please answer all of the questions.

a. Name two principal types of cost accounting systems.

Two types of cost accounting systems are process cost systems and job order cost system.

b. Which system provides for a separate record of each particular quantity of product that passes through the factory?

Job order systems provides for a separate record of each particular quantity of product that passes through the factory.

c. Which system accumulates the costs for each department or process within the factory?

Process cost systems accumulates the costs for each department or process within the factory. ------------------------------------------------------------ What kind of firm would use a job order cost system?

Firms that manufacture custom goods to fill special orders from customers and many service firms also use job order cost system.

------------------------------------------------------------ Hewlett-Packard Company assembles ink jet printers in which a high volume of standardized units are assembled and tested. Is the job order cost system appropriate in this situation?

No, the process cost systems is best suited for manufacturers units of product that are not distinguishable from each other during a continuous production process. In this case, Hewlett-Packard Company assembles ink jet printers in high volume and in standardized units, process cost system should be the system be used.

------------------------------------------------------------ Which account is used in the job order cost system to accumulate direct materials, direct labor, and factory overhead applied to production costs for individual jobs?

Product costs account.
------------------------------------------------------------ Discuss how the predetermined factory overhead rate can be used in job order cost accounting to assist management in pricing jobs.

The predetermined factory overhead rate is to ensure...
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