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CMA Final · Strategic Cost Management · Uniform Costing and Inter-firm Comparison

Four cement firms in an industry association agree to adopt uniform costing. Which of the following is the most direct benefit that arises specifically from adopting uniform costing among member firms?

Uniform costing gives comparable cost data across firms because all members apply the same costing principles, methods and reporting formats. It does not equalise selling prices, guarantee profits or remove the need for internal records, which still supply the figures.

  1. AElimination of all differences in selling prices among the firms
  2. BComparable cost data across firms because common methods and principles are usedCorrect
  3. CGuaranteed higher profit for the weakest firm in the group
  4. DAutomatic removal of the need for any internal cost records

Explanation

Uniform costing means member firms follow the same costing principles, methods and formats, so their cost figures can be compared meaningfully. It does not fix prices, guarantee profits, or replace internal cost records, which are still needed to supply the data.

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