Exam One

Question 1

What is cost accounting?

Answer 1

Cost accounting involves the measuring, recording, and reporting
of product costs. From the data accumulated, companies
determine both the total cost and the unit cost of each product.

Question 2

What does a cost accounting system consist of?

Answer 2

accounts for the various
manufacturing costs. These accounts are fully integrated into the
general ledger of a company. 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

Question 3

What are the two basic types of cost accounting systems?

Answer 3

a. A job order system, where the company assigns costs to
each job or to each batch of goods, and
b. A process cost system, used when a company manufactures a
large volume of similar products.