Case 19-1: Bennett Body Company
Note: This case is unchanged from the Eleventh Edition.
Approach
This case contrasts a standard cost system with an actual job cost system, and thereby brings out several points about cost accounting, including: the purposes for which cost accounting data are used; the paperwork involved in cost accounting; the use of costs for pricing; the problem of controlling costs under the two types of systems; and the problem of the normal overhead rate.
Students may have difficulty in seeing that: (1) in the Conley standard cost system, costs are not traceable to individual bodies or models, and therefore no comparison of actual and standard costs by models is possible; (2) the Conley system easily could be changed to permit comparison of actual and standard labor and material costs by models, but it is doubtful that such information would be useful for control; 
(3) the variances have no meaning unless the standard costs for each model are reasonable; (4) the overhead variance in Exhibit 1 is meaningless; and (5) the paperwork involved in the Conley system is less than that in the Bennett system.
Comments on Questions (Numbered as in Mr. Bennett’s memorandum)
It may be well to discuss the Bennett system first. The subject may be broken down into records of material, labor, and overhead cost, and the job-cost sheet. Enough hints are given in the case so that students should be able to visualize the contents of the documents needed to record the incurrence of each type of cost and how information is recorded on the job-cost sheet. They should also see that the work involved is not great (perhaps they can even estimate roughly the number of pieces of paper required). Presumably somewhat less work would be required in the Conley system since only actual aggregate labor, material, and overhead costs by department would be compiled, plus