1. (a) Joe Delong is not sure about the difference between cost accouting and a cost accounting system. Explain the difference to Joe.
Answer:
Cost accounting involves the measuring, recording, and reporting of product costs. A cost accounting system consists of manufacturing cost accounts that are fully integrated into the general ledger of a company.
(b) What is an important feature of a cost accounting system?
Answer:
An important feature of a cost accounting system is the use of a perpetual inventory system that provides immediate, up-to-date information on the cost of a product.

2. (a) Distinguish between the two types of cost accounting systems.
Answer:
The two principal types of cost accounting systems are: (1) job order cost system and
(2) process cost system. Under a job order cost system, costs are assigned to each job or batch of goods; at all times each job or batch of goods can be separately identified. A job order cost system measures costs for each completed job, rather than for set time periods. Under a process cost system, product-related costs are accumulated by or assigned to departments or processes for a set period of time. Job order costing lends itself to specific, special-order manufacturing or servicing while process costing is better suited to similar, large-volume products and continuous process manufacturing.
(b) May a company us both types of cost accounting systems?
A company may use both types of systems. For example, General Motors uses process costing for standard model cars and job order costing for custom-made vehicles.

3. What type of industry is likely to use a job order cost system? Give examples.
A job order cost system is most likely to be used by a company that receives special orders, or custom builds, or produces heterogeneous items or products; that is, the product manufactured or the service rendered