1. The directors of the firm where you work have asked you to explain whether the job order cost accounting system or the process cost accounting system provides the more accurate costs for each unit of product. What will you tell them?
2. What are the benefits of perpetual inventories to management?
3. How would managers use the cost of labor for each equivalent unit to help control costs?
4. Why would a comparison of the cost per equivalent unit of each cost element (materials, labor, and overhead) for the current month with that of the preceding month be useful to management?
5. A manager in the company where you work asks why it is necessary to convert production to equivalent units when determining the cost of each unit of product produced under the process cost accounting system. Explain.