Why is uniform costing implemented?
Uniform costing method is implemented due to the following advantages:
- A useful tool for management control as the individual performance is measured against norms set for the industry as a whole.
- It avoids cut-throat competition.
- Weaker units can take the advantage of the efficient methods of production so as to increase their own efficiency.
- The achievements in research and development programmes may be shared by the bigger units with the smaller units.
- Provides the best cost control system or cost presentation in the entire industry.
- It assists in educating the less informed units regarding the cost accounting methods.
- It enables a comparative assessment between the two sectors.
- It helps the government in regulating prices of essential and important items.
- It helps in price fixation.
- It simplifies the work of wage boards to fix minimum and fare wages for an industry.
-It helps trade association in negotiating the government in the trade matters.