While setting up a cost accounting system in the manufacturing companies, two questions’s answers that must be paid attention: What we produce? and How we produce?. Therefore, it is important to set up a cost accounting system in accordance with the description that mentioned below.
Job order cost system: The job order cost system is used by the companies which produce the product in parallel with the customer demand and generally the companies that does not produce the same product continuously. It is opened an order card and followed the production with the order cards. An order card is consist of sequential job orders.
Process costing system: The process costing system is used by the companies which do the mass production and produce the same products in the production line. It is measured the percentage of completion of the products and the semi-products. Thus, the completed products and semi products costs are calculated.
