The Balanced Scorecard (BSC) is a strategic performance management tool - a semi-standard structured report, supported by proven design methods

and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions Design of a Balanced Scorecard ultimately is about the identification of a small number of financial and nonfinancial measures and attaching targets to them, so that when they are reviewed it is possible to determine whether current performance 'meets expectations'. The idea behind this is that by alerting managers to areas where performance deviates from expectations, they can be encouraged to focus their attention on these areas, and hopefully as a result trigger improved performance within the part of the organisation they lead. The original thinking behind Balanced Scorecard was for it to be focused on information relating to the implementation of a strategy, and perhaps unsurprisingly over time there has been a blurring of the boundaries between conventional strategic planning and control activities and those required to design a Balanced Scorecard. This is illustrated well by the four steps required to design a Balanced Scorecard included in Kaplan & Norton's writing on the subject in the late 1990s, where they assert four steps as being part of the Balanced Scorecard design process: 1. 2. 3. 4. Translating the vision into operational goals; Communicating the vision and link it to individual performance; Business planning; index setting Feedback and learning, and adjusting the strategy accordingly.

These steps go far beyond the simple task of identifying a small number of financial and non-financial measures, but illustrate the requirement for whatever design process is used to fit within broader thinking about how the resulting Balanced Scorecard will integrate with the wider business management process. This is also illustrated by books and articles referring to Balanced Scorecards confusing the design process elements and the Balanced Scorecard itself. In particular, it is common for people to refer to a strategic linkage model or strategy map as being a Balanced Scorecard. Although it helps focus managers' attention on strategic issues and the management of the implementation of strategy, it is important to remember that the Balanced Scorecard itself has no role in the formation of strategy. In fact, Balanced Scorecards can comfortably co-exist with strategic planning systems and other tools. Uniform costing & Inter firm comparison 1. Write notes on : Points on which Uniformity is essential before introducing Uniform Costing. The points in respect of which uniformity is required to be established before the introduction of uniform costing in an industry are as below : Uniformity in the size of various units where uniform costing is to be introduced. The size of units should be more or less the same which are to be brought under uniform costing. Units differing in size should be classified in a number of categories according to their size. Since the cost structure in an organisation is influenced by its size, the classification of units based on their size would make the cost statements of these units more comparable. Uniformity in the production method : All units in an industry should use uniform methods of production. Uniformity in the accounting method, principles and procedures. In fact, the uniformity should be achieved in respect of following : Identifying stages of production where costs are to be measured. Same methods of valuing inventory should be used. Cost unit.

Classification of costs and its components. Identifying methods of pricing material issues. Methods of remunerating and providing incentives to labour. Basis of allocation and apportionment of overheads. Basis of distribution and redistribution of overheads. Methods of depreciation. Treatment of notional expenses. Treatment of material losses. Allocation / apportionment of joint costs. Preparation of cost statements, reports and their submission schedule. 2. What are the requisites for installation of a Uniform Costing System ? Requisites for the installation of a uniform costing system : i. ii. iii. iv. v. The firms in the industry should be willing to share/furnish relevant date/information. A spirit of cooperation and mutual trust should prevail among the participating firms. Mutual exchange of ideas, methods used, special achievements made research and knownhow etc., should be frequent. Bigger firms should take the lead towards sharing their experience and known-how with the smaller firms to enable the latter to improve their performance. Uniformity must be established with regard to several points before the introduction of uniform costing in an industry. In fact, uniformity should be with regard to following points.

Size of the various units covered by uniform costing. Production methods. Accounting methods, principles and procedures used. 3. Uniform Cost Manual : It is written document, which may be in the form of a booklet or bulletin, containing the principles, methods and procedures for the ascertainment and control of cost in uniform costing. It is necessary for the successful operation of uniform costing system. Such a manual provide guidelines to the participating firms to organise their cost accounting system on a uniform basis. The following are the salient features of a uniform cost manual. It includes statement of objectives and purpose of the system, scope of the system, advantages and extent of co-operation necessary. It contains the general principles of accounting, nature of coding, terminology to be followed, classification and description of accounts. This section also includes details of stock control, labour and overhead cost collection and control. Essential cost data and various ratios to be computed for comparison of performance and efficiency in the operation of the participation units. Mode, format and time for presenting cost data and reports to the management. It provides necessary guideline about the treatment of depreciation, interest on capital wastage, scrap, by-product, etc. 4. Explain in brief the advantages and limitations of uniform costing .

Answer.: Uniform costing refers to the use of the same costing principles and practices by several undertakings. These undertakings may or may not be under the same management. Adherence to the same costing methods and procedures specially when there can be two or more options is the characteristic feature of a uniform system of costing. Advantages of uniform costing : The following are the advantages of uniform costing.

The management of an individual firm / unit will be saved of the botheration of developing and introducing a costing system of their own.

A uniform costing system for the firms in the same industry is provided for the adoption of such undertakings. Since, the system is devised by mutual consultation and after considering the difficulties and circumstances prevailing in the various undertakings, therefore it is readily adopted and successfully implemented.

It facilitates comparison of cost figures of various firms. Such a comparison enables the firms to identify their weak and strong points and control costs effectively and efficiently. The available of cost data of other firms in the industry enables each firm to know its standing in the industry. The benefits of research and development of bigger firms are made available to smaller firms at no cost.

This system of costing requires the introduction of a uniform wage system in all the firms in the industry. The introduction of a uniform wage system reduces labour turnover. It helps trade associations in negotiating with the government in trade matters, particularly, when an industry seeks any assistance or concession from the government in matters of subsidies, exports, taxation, duties and price determination, etc.

Uniform costing is of great help in price fixation. Unhealthy competition is avoided between the firms in the same industry in framing policies and submitting tenders. It helps the government also in regulating the prices of essential and important items such as bread, flour, sugar, cement and steel etc.

Limitations of uniform costing :

Due to the differing circumstances in which firms operate, it is difficult to have uniform standards, methods and procedures of costing. This renders the adoption of uniform costing difficult. Adoption of a uniform costing system requires various firms to disclose their cost and other data. Some of the firms do not like this and are thus hesitant towards the use of this costing system. Small firms feels that uniform costing system is meant only for large and medium size firms and thus they cannot afford it. Some feels that the use of this system of costing may lead to monopolistic tendencies resulting in artificially raised higher prices and curtailing supplies.