MANAGEMENT ACCOUNTING PROJECT

MANAGEMENT ACCOUNTING PROJECT - 1 We gratefully acknowledge...

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We gratefully acknowledge the valuable guidance, suggestions and clarifications. We are thankful to our teacher, colleagues and friends for their significance support. PROF. BHARAT PATEL deserves special thanks for his support and encouragement during the preparation of this project. 2
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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
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Application of Uniform Costing System :- Single Company having a number of factories located at different places producing similar products or performing similar operations. For example, this system is being used by Associated Cement Company for its plants. In this case, management prescribes a set of forms and procedures for the plant and all the records are maintained in a uniform manner. A number of companies within the same industry. Normally Trade Associations or Chambers of Commerce coordinates the function of uniform costing system. Members of the association are required to maintain uniform costing records which are helpful in measuring the operating efficiency of its members. It ensures that cost data submitted by member companies are comparable and consistent. Introduction of Uniform Costing helps the companies to submit reliable cost data to price fixing bodies, like Bureau of Industrial costs and Prices or other Govt. departments to determine the average cost and fixing
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MANAGEMENT ACCOUNTING PROJECT - 1 We gratefully acknowledge...

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