Академический Документы
Профессиональный Документы
Культура Документы
2
Uniform costing is not a separate or distinct method
of cost accounting like job costing or process costing.
It is only a system of cost accounting to be used by
the members of the industry or trade association. It
involves adoption of same costing principles, practices
and procedures by the individual members of the
industry for inter-firm comparison.The system is made
operative through Trade Association or Chamber of
Commerce or some other central agency. Its
underlying idea is that whatever costing methods are
used, the same should be applied uniformly by all the
members of the industry. Before a uniform costing
system is applied, it is utmost necessary to educate
the members about the desirability of this system and
its underlying principles. Uniform costing is not a new
concept. It was first introduced by the National
Association of Stove Manufacturers of U.S.A. which
developed a uniform formula for use by its members
for costing industry’s products. Similarly, a uniform
costing system was adopted for printing industry in
the United States. But in U.K., British Federation of
Master Printers was the first organisation to introduce
a uniform costing system. In India, it is being used in
coal industry, steel industry and fertiliser industry.
There is a good scope of using uniform costing system
in other industries too. CIMA defines uniform
accounting as “a system, using common concepts,
principles and standard accounting practice, adopted
by different entities in the same industry to facilitate
inter-firm comparison.”
3
Application of Uniform Costing System:-
4
Objectives of Uniform Costing:-
5
Member-companies adopt one best method of
cost accounting system known to the industry.
This eliminates unsound method and saves
costs required in perfecting systems through
expensive experimentation.
6
It helps the Chambers of Commerce and
Industry to present their case to Government
on matters such as tariffs or export incentives.
7
The various member-units in an industry differ
widely with regard to location, age, condition
of plant and degree of mechanization. This
difference is sometimes so wide that it does
not permit efficient use of uniform costing
system.
8
For successful application of uniform costing
system, the following conditions must be
satisfied:
9
The term ‘Uniform Cost Plan’ covers activities
such as cost accounting system, format for
reports, analysis of cost data, etc. Some of the
activities which may be carried on partially or
completely are as follows:
10
Whether cost data are required for one product
or al the products produced in a factory.
direct material
direct labour
cost of direct services
factory overheads, administrative and selling
overheads.
11
Treatment of handling and storage cost of raw
materials.
12
For successful implementation of uniform costing system,
it is the primary duty of a Trade Association of devise a
cost manual containing recommended cost accounting
plan. All the participant members should be invited for
detailed discussion before a cost manual is finalised. The
cost manual is of immense help in guiding the
participating firms to operate their accounts on uniform
basis. If the industry consists of companies of similar size
and a common range of products, it is entirely feasible to
present the accounting procedure in one manual for use
of all members. Where, however, there is a great
disparity in size of companies in an industry, it is better
to issue a separate manual for large companies and one
for the small.
13
Introduction
Statement of objectives and purpose of the
system.
Education the management and people about
the uniform costing system
Scope of the system.
Case for use of the system.
Organisation
Organisation for developing and operating the
system.
Stages in which the system is to be introduced.
Management of the organisation by trade
association or otherwise.
Accounting system
General principles of accounting to be
adopted.
Terminology to be followed.
Details of coding system.
Classification and description of accounts.
Reconciliation between financial accounts and
cost accounts.
Accounting period.
14
Method of costing [e.g. process costing,
job costing, standard costing.]
Unit of production.
Costing periods [e.g. monthly, quarterly, half-
yearly or annual]
Expenses to be considered in costs.
Methods to be used for inter-unit transfer
pricing.
Classification of departments [Production
department, service department, etc.]
Material cost – direct and indirect, treatment of
idle time, treatment of fringe benefits,
overtime, production bonus.
Overhead–classification,collection,
apportionment and allocation. Direct and
indirect depreciation, method of depreciation
to be used, research and development
expenditure,methodofallocation/appotionment
of service department cost to production
department, capacity cost etc.
Reporting.
Periodically of reports.
15
Nature and extent of information to be
accumulated
16
various trade associations, chambers of commerce, the
national productivity council, research and statistics
division of several commerce and trade journals and
periodicals and newspapers.
17
industry. The industry awas divided into various
groups each having its own ratios based on
differents characteristic of the firms. The division is
based on the following characteristics:
18
from inter firm comparison:
19
It forces ‘self searching’ exercise among the
members-firms.
20
implementation of IFC scheme are summarized
below.
21
GOOGLE.COM
YAHOO.COM
22
23