Skip to content

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

Four cement firms in an industry association decide to adopt uniform costing. Which of the following is the most direct advantage they obtain from adopting it?

The main advantage is comparability. When firms follow the same costing principles, methods and formats, their cost figures can be compared meaningfully. Uniform costing does not force identical prices or profits, and each firm still has to maintain its own cost records.

  1. ACosts of the member firms become comparable because the same principles and methods are usedCorrect
  2. BEvery member firm is compelled to charge the same selling price
  3. CAll member firms report identical profits
  4. DIndividual firms no longer need to maintain their own cost records

Explanation

Uniform costing means using the same costing principles, methods and formats across firms, so cost data can be compared meaningfully. It does not fix selling prices, equalise profits or remove the need for each firm's own records, so the other options are wrong.

Did you get it right without looking?

One question tells you little. A timed set on Uniform Costing and Inter-firm Comparison shows your real accuracy, how long you take and where you lose marks.

Practise Uniform Costing and Inter-firm ComparisonFree diagnostic mock

More Uniform Costing and Inter-firm Comparison questions