MANAGEMENT ACCOUNTING PROJECT

It is to be pointed out here that actual figure sof

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It is to be pointed out here that actual figure sof profit or other details are not issued to members so that there is no betraying of confidence. Emphasis is always laid on depicting the average results so that a single firm can make a comparison to see whether its own ratios are equal, better or worse than the average for its own particular group. For each ratio the median and upper and lower quartiles are computed. The principal ratios used by the principal industry in u.k are given. 17
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The benefits from inter-firm comparson include the advantages of uniform costing system and benefits arising out of the use ratios. The advantages of uniform costing system has been discussed before. The following additional advantages are obtained from inter firm comparison: The extent of weakness of the participating firms is reaveled. Management is, therefore induced to take suitable remedial actions. The participating firms give information voluntarily and willingly in the prescribed questionare. The definations of various terms are clearly explained to the users. Thus the results obtained from the information are accurate and capable of being compared. Inter- firm comparison promotescost consciousness among the members of the industry. It enables the government to take measuresfor effecting price regulation. It facilitates government to grant protection to industries, wherever necessary. It introdues a sense of healthy competition among the participating firms. 18
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It provides substantial data to the members-firms to present their case to government. It forces ‘self searching’ exercise among the members-firms. The benefits arising from inter-firm comparison have been 19
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outlined above. It is very good practice which promise substantial benefits to the members of the industry. The practical difficulties which are often experienced in the implementation of IFC scheme are summarized below. The member-firms often express resistance to the idea of disclosing data relating to the performance. Satisfaction with the present profits may bring about a sense of complaceny which is disastrous for active participation in the implementation of IFC When the companiesdo not follow suitable cost acconting system,the inter firm comparison will not be meaningful and effective. Non availability of suitable basis for comparison presents problem to the introduction of IFC. 20
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                  GOOGLE.COM YAHOO.COM COST ACCOUNTING BY JAWAHAR LAL COST ACCOUTING BY SULTAN & SONS 21
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  • Spring '10
  • Hani
  • Cost Accounting, uniform costing, Uniform Costing System, inter-firm comparison

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