Disadvantages of Uniform Costing
Being a combined activity, the uniform costing suffers several disadvantages. Some of them are as follow -
1. It forms monopoly at end since the large units might compute the available data for their advantages and small units have to surrender to them.
2. The variation in the size of member units usually may not permit to adopt all rules and creates of the uniform costing, since so many times such type of data is not present or is not affordable to make it present to some weak units.
3. Implementation and execution of this system requires greatest good faith between all members. So unrealistic or lethargy or ambiguous data supply through any one or more units forms confusion and defeats the objects of the system failure.
4. Several times it is observed that members are ready to receive the information of other units but hardly provides their own information clearly. That is why it creates operational hindrances in the system.
If we intimately monitor these limitations it can be understood that these are the operational problems and not essential problems in the system. The major point is the mutual understanding and belief. If that is built in fine sense it surely brings all advantages to the concerned parties.
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