ACFI2003 is based on the following fundamental costing principle: cost-management systems should reflect the fact that different costs are relevant for different purposes.It means that the design of a costing system should represent the unique characteristics of the production process.Sophia does not "get" this; it is far too abstract for her.

Required:

You are asked to help Sophia by explaining how the fundamental costing principle, "different costs are relevant for different purposes", affects the way in which job and process costing systems are designed/constructed.

In your answer briefly explain/describe the process and job costing systems and explain the production context in which each system produces relevant and useful information for management.Consider the rationale for choosing different cost objects for each system and how costs are accumulated under each costing system.