Introduction to Uniform Cost-manual
Within uniform costing methods, numbers of the units of dissimilar sizes and peculiarities are participated. On such type of background, the adoption of a uniform cost plan presupposes the presence of the uniform cost manual.
It can be described as, "the set of instructions to be followed in cost ascertainment and cost control and it is the proof of presence of the uniform cost plan between the member units."
The uniform cost manual explains the scope and nature of the cost plan. It also lays down the technique for implementing and operating such type of cost plan. To the participants it is an operating guide who has to bring about uniformity in costing procedures and principles in accordance with the statement of the objectives.
The United States Chamber of Commerce acquires the major objectives of such manual as follows -
1. Selling appeal that is they should exist in an interesting way the compelling reasons for the desirability of making use of uniform techniques.
2. Serving as a complete reference book on accounting procedures.
3. Helpfulness to the executives and accountants in solving problems of installation of the suggested uniform methods.
Contents of the cost manual
An explanatory cost manual might involve the following contents in it though such contents are all the time relies on the numbers of the units, depth of the system and object of the system.
A. Introduction
This part explained the object, depth scope, of the system. It also indicates the benefits accrue to the members and clears the disadvantages also.
B. Accounting systems and procedures -
In this part the areas covered within the system are obviously mentioned. Additionally general principles of accounting, nature of classification and codification, conventions to be followed, terminology to be used etc. are discussed in length. The technique of costing, relation with the financial accounting, treatment of dissimilar items of cost that require special attention etc.
C. Reporting and statements -
The cost manual provides detailed instructions concerning to the presentation of data and information. It also prescribes make use of uniform forms for several statements to be ready and reports to be made. Even the periodicities of reports are also mentioned to the extent possible. The ratios to be computed mandatory and obligatory, the graphs and diagrams to be ready, etc. are also provided in the manual.
D. Other information
In this section dissimilar aspects like tax impacts, depreciation, wastage, interest on capital, by product costing, etc. are discussed. Additionally in this part the doubts take place by the users, suggest remedies to the problems, and suggest optional areas for the uniformity, etc. are cleared. This part is several times prepared in the form of Bulletin. It might be published by regular time interval.
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