Inter-firm comparison is a natural outcome of uniform costing system. Uniform costing is the foundation stone over which the structure of IFC is developed and adopted in a large scale. Inter-firm comparison can be defined as the technique of evaluating the relative performance, efficiency, costs and profits of firms in a given industry’.
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.Need for Inter-Firm Comparison 3. Pre-Requisites 3. Advantages 4. Limitations. Meaning of Inter-Firm Comparison: Inter-firm comparison is the technique which studies the performances, efficiencies, costs and profits of various concerns in an industry with the help of exchange of information in order to have a relative comparison.Here you can get homework help for Uniform Costing and Inter firm Comparison, project ideas and tutorials. We provide email based Uniform Costing and Inter firm Comparison homework help. You can join us to ask queries 24x7 with live, experienced and qualified online tutors specialized in Uniform Costing and Inter firm Comparison.
Uniform costing system reveals unprofitable products or product lines and provides valuable information to strengthen them. 6. Uniform costing also creates confidence in the customers that prices have been fixed with reliable data of costs. 7. Uniform costing enables regulatory bodies and government to collect required data relating to the.
Advantages of Uniform Costing. The use of uniform costing provides the following advantages to different sectors. 1. For members units (a) Fixation of selling prices: Accumulation of cost data on sound principles helps in determining selling on a uniform basis to suit the requirements of all the participating firms. (b) Healthy competition: Removal of rivalries and enmities inculcates a spirit.
There is no comparison between Job Costing and Process Costing because both the methods are used in different industries. Although, the differences exist in the two methods. One such difference is, each job requires a high degree of supervision and control, but the process does not require so, as they are standardized in nature.
Uniform costing method can be advantageously applied: - In single organisation having number of branches. - In a number of firms in the same industry who are inter connected through trade association. - In industries which are similar such as cotton, gas and electricity.
Inter-Firm Comparison (IFC): Meaning, Objects, and Other Details Here we detail about the meaning, objects, method, ratios, advantages and limitations of Inter-Firm Comparison (IFC). Meaning: Inter-firm comparison is a natural outcome of uniform costing system.
Traditional costing is also significant tools for performance management because they can avoids virtual losses being given and show higher profit in accounting report. After discussing both traditional costing and target costing, we can see that both systems also have its advantage towards a company.
Activity Based Costing vs Traditional Costing. Costs associated with a product can be categorized as direct costs and indirect costs. Direct cost, is the cost which can be identified with the product, while indirect costs are not directly accountable to a cost object.
Both job costing vs process costing itself are different from each other, One is used job-based industry on the basis of batches and another one process based product is used in mass production industries. And one of the major difference between job costing vs process costing is job-based process requires high precision and control over the job.
Advantages of Uniform Costing Pricing. Advertisement: The advantages accruing from the use of uniform costing system are as follows :- 1.. Standing in the industry of each firm will be known by making a comparison of its cost data with others. 6.
Types Of Costing Methods Accounting Essay Introduction. Financial accounts are the records of the financial dealings of the business, their daily transactions. The main role of financial accounting is to record financial transactions such as collecting money from sales, paying suppliers, salaries and wages.
The difference between marginal costing and absorption costing is a little complicated. In Marginal Costing, Product related costs will include only variable cost while in case of Absorption costing, fixed cost is also included in product related cost apart from variable cost.
Difference Between Marginal Costing and Absorption Costing. Both the Marginal costing and absorption costing are the two different approaches used for valuation of inventory where in case of Marginal costing only variable cost incurred by the company is applied to the inventory whereas in case of the absorption costing both variable costs and fixed costs incurred by the company are applied to.
Marginal costing applies only those costs to inventory that were incurred when each individual unit was produced, while absorption costing applies all production costs to all units produced. This results in the following differences between the two methods: Cost application.Only the variable cost is applied to inventory under marginal costing, while fixed overhead costs are also applied under.
Companies often use standard cost accounting systems in conjunction with a process costing system. The company experiences a couple of benefits from using the two systems together. First, the same accounts used to accumulate standard costs during the budget process can be used to accumulate costs during the year.