Exclusive presentation regards uniform costing and inter-firm comparison

1. Uniform and Inter-firm Costing Methods:
Prepared by
Mr. Basavaraj M. Naik M.com, UGC NET, KSET.
Teaching Assistant,
Department of studies in commerce
Rani Channamma University, Belagavi
Post-Graduate Centre, Jamkhandi.

2. Meaning of uniform costing:
Uniform costing is the application of the same accounting and
costing principles, methods or procedures uniformly by various
undertakings in the same industry. It is a particular technique
which applies the usual accounting methods like standard costing,
marginal costing, and budgetary control.

3. The basic idea behind uniform costing is that the different
concerns in an industry should adopt a common method of
costing and apply uniformity the same principles and
techniques for better cost comparison and better good.

4. Features of uniform costing:
1. The same costing principles are applied by all member units for
ascertaining cost.
2. Cost statements and reports are prepared on a uniform basis.
3. The accounting period is common for all member units.
4. All the member units adapt the same costing methods,
techniques and systems for collection, ascertainment and control
of cost.

5. Need of uniform costing:
1. Size of Business: In small concerns all the problems are handled by one person and there is no
need of elaborate system of costing but in big business there is need of division of work and
responsibility and the authority is given to the different levels of managers to complete their work
efficiently.
2. Nature of Business: The nature of businesses differs because of different manufacturing
processes and the types of machines used. Some concerns use heavy machinery for
carrying out their operations while others use labour intensive machines.
3. Product Differentiation: the need for uniform costing arises because of differences in size
and organisation set up, wage structure, methods of production and degree of automation
and application of different methods and principles of cost accounting.

6. Objectives of uniform costing:
1. Fixation of Common Price:
2. Improving Performance:
3. Inter Unit Comparison of Cost of Production:
4. Control of Cost:
5. Helpful for General Control Over Member Units:

7. Essential Requisites of Good Uniform Costing System:
1. The firms in the industry should be willing to share/ furnish relevant data
2.A spirit of cooperation and mutual trust should prevail among the
participating firm.
3.Mutual exchange of ideas, methods used, special achievement made,
research etc should be frequent.
4.Bigger firms should take the lead towards sharing their experience and
know-how with smaller firms to enable the latter to improve their
performance.

8. Meaning of Uniform Costing Manual:
A uniform costing manual is a booklet which contains detailed instructions to be
followed by various firms in an industry in connection with cost determination
and control. It is a formal document which lays down the recommended cost
accounting plans; policies and other related matters, so that system can be
operated effectively.
A typical uniform costing manual details the objectives and the method of its
administration and the procedure to be followed for regular collection, analysis
and reporting of cost data and their interpretation to the member units.

9. Contents of Uniform Costing Manual:
A typical costing manual may contain the following:
1. Introduction: The introduction part of the manual may include the statement of
objectives and the purpose of the system, scope of the system, advantages to be
derived, educating the management to appreciate the system, and the extent of
cooperation necessary.
2.Organisation: This part will include the organisation for developing and operating
the system and the stages in which the system is to be introduced.
3.Accounting System and Plans: The manual should also include essential
details regarding material, labour and overhead costs, collection and control.
4. Presentation of Information:

10. Inter-firm Comparison:
Inter-firm comparison is the technique which studies the performances,
efficiencies, costs and profits of various concerns in an industry with the
help of exchange of information in order to have a relative comparison.

11. Objectives of Inter-firm Comparison:
1. To know where one stand
2. Locate the weakness and area of improvement
3. Adequacy of the profits
4. Minimisation of wastage

12. Requirements (Pre-Requisites) of an Inter-Firm Comparison
Scheme:
1. Adaption of Uniform Costing
2. Organisation Responsible
3. Information to be collected
4. Method of Collection and Presentation of Information

13. Advantages of Inter-firm Comparison:
1. Managerial efficiency
2. Cost consciousness
3. Increase the productivity
4. Proper decisions
5. Standardisation of production process
6. Overall view of the industry

14. Limitations of Inter-Firm Comparison:
1. No secrecy
2. Do not disclose the relevant data
3. Unreliable figures
4. Ignoring of time factors

15. Thank you