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Uniform Cost Manual

Uniform cost manual is a booklet containing detailed instructions to be followed by different firms in an industry having uniform costing in connection with cost determination and cost control. The manual is a formal document laying down the recommended cost plans, policies and other relevant matters necessary for effective operation of the uniform costing system. The manual thus helps the units to check the adherence to the plan and correctness of the steps taken by them to achieve uniformity. The following are the essential contents of a uniform cost manual.

1. Appraisal of objectives, scope, advantages and limitations: The manual should contain a detailed statement regarding the objects for which the uniform costing system is being put into operation; the scope of the system has to operate. This will give a complete idea about the suitability or otherwise of the system to all the member-units.

2. Principles and procedures to be adopted: The manual should mention the costing principles and procedures which are required to be adopted by the participating firms. The details about methods of cost ascertainment, cost accounting and cost control – are essential to be specially pre-determined and laid down in the scheme. The method of computation of total cost, the definition of its different components, the basis for allocation, apportionment and absorption of costs and instructions regarding treatment of other important items should also be provided therein.

3. Presentation and reporting techniques: The mode of compiling, presenting and reporting data about uniform costs should be clearly mentioned in the manual. Reporting to the management, the shareholders and the parent organisation or the trade association must be fair and accurate for the successful achievement of the objectives laid down.