USES OF AN EFFECTIVE COST SYSTEM 
The uses of an effective system of cost accounting in a foundry may be summarized thus: 
i. To ascertain the cost of making castings. 
2. To measure the efficiency of labor. 
3. To ascertain the consumption of materials and supplies. 
4. To serve as a guide for correcting faulty operating methods. 
To provide the stimulus of chronological comparative records. 
To furnish data for intelligent merchandising. 
A foundry cost system that properly serves the above purposes must be practicable in operation. The 
data required by executives must be so arranged that they may be transmitted to operating and sales executives 
in a systematic manner, permitting quick and accurate analysis. 
From the above, it is manifest that cost accounting has three general functions to perform. It must 
provide data for the preparation of financial statements; it must serve the management in controlling opera- 
tions; and it must be a means for preventing a serious loss in meeting competition. 
UNIFORM COST FINDING METHODS 
Uniform methods of cost finding in an industry are without question very beneficial in promoting 
stability, business economy, efficient management, and lower costs. Uniform cost finding implies the use of 
the same principles and should not be construed as the use of standardized cost figures for an industry 
There are two fundamental requirements for uniform cost finding: viz., the use of a standard classi- 
fication of accounts and division of the business into departments, and the use of a uniform method of apply- 
ing indirect and overhead expense to individual castings. The first requirement insures the charging of all 
the elements of cost to the proper accounts or departments. The second requirement is an aid in the elimina- 
tion of great differences in costs among various foundries, which are caused chiefly by the use of different 
methods of applying indirect and overhead expense to individual castings. 
A uniform method of cost finding in an industry is especially advantageous for establishing marketing 
policies. Vast differences in the costs of making specific castings at various foundries are usually due more 
to the use of different methods of cost finding than to methods of production or other economic conditions. 
The only true and logical differences in costs that should occur are those caused by the local conditions at 
certain foundries which enable the production of castings at different costs from those at other foundries. 
Wide variations in costs due to the use of different cost finding methods are apt to be detrimental to the en- 
tire industry, and therefore, they should be minimized by the use of a more uniform cost-accounting practice, 
There will always be differences in costs of making castings at various foundries, but these differences should 
be caused only by certain local conditions such as location of plant, management, shop practice. purchasing, 
atc. 
ADVANTAGES OF A UNIFORM COST SYSTEM 
Among the many advantages offered by uniform cost accounting in an industry, the following are cited 
by the Department of Manufacture of the Chamber of Commerce of the United States in its pamphlet en- 
titled “Uniform Cost Accounting in Trade Associations”: 
Provides the ‘one best way’ known to the industry to figure costs (although cost accounting is a 
progressive science and provision should be made for keeping the uniform methods up-to-date) 
thereby eliminating expensive experimentation by the members of the industry individually and 
‘ndependently. 
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Results in a better informed competition within the industry. 
inspires confidence in the public that selling prices are established by producers who have full 
«<nowledge of the costs of the articles offered for sale.