Cost Accounting and Production Control in a Multiproduct Environment – The Unit of Production Effort Method

Takes a fresh look at the nature of the problem of allocating costs and control processes for a variable product mix. Adopts a novel approach called the “Unit of Production Effort” method. The method creates a common measure throughout the production process which can then be used in all costing, planning and comparison activities. Describes the initial stages of a practical implementation of the method to a small manufacturing company to illustrate the way in which it can be applied in a real situation. The results suggest that the method provides a radical simplification of the multi‐product environment which will be of interest to a broad cross‐section of professionals ranging from theorists to practising financial and production managers.