What is uniform costing? What is the scope of uniform costing?

Uniform Costing: It is not a distinct method of costing when several undertakings start using the same
costing principles or practices, they are said to be following uniform costing. Different concerns in an
industry should adopt a common method of costing and apply uniformly the same principles and
techniques for better cost comparison and common good and helps in mutual cost control and cost
reduction. Hence, it is recommended that a uniform method of costing should be adopted by the
member units of an industry.
Objectives of Uniform Costing
i. Facilitates Comparison
ii. Eliminates Unhealthy Competition
iii. Improves Efficiency
iv. Provides Relevant Data
v. Ensures Standardisation
vi. Reduces Cost

Advantages of Uniform Costing
The advantages accruing from the use of uniform costing system are as follows :-

1. The management of each firm will be saved from the exercise of developing and introducing
a costing system of its own.

2. A costing system devised by mutual consultation and after considering the difficulties and
circumstances prevailing in different firms is readily adopted and successfully implemented.

3. It facilitates comparison of cost figures of various firms to enable the firms to identify their
weak and strong points besides controlling costs.

4. Optimum achievement of efficiency is attempted by all the firms by utilising the experience
of other concerns in the industry.

5. Standing in the industry of each firm will be known by making a comparison of its cost data
with others.

6. Services of cost consultants or experts may be available jointly to each firm in the industry by
sharing their experiences and expenses.

7. Research and development benefits of bigger firms may be made available to smaller firms.

8. It helps in the reduction of labour turnover, as a uniform wage system is the precondition of a
uniform costing system.

9. It helps Trade Associations in negotiating with the Government for any assistance or
concession in the matters of taxation, exports, subsidies, duties and prices determination etc.


-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.


- -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.