Cost accounting and production control in a multiproduct environment-The Unit of Production Effort method

This paper takes a fresh look at the nature of the problem of allocating costs and control processes for a variable product mix. It 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. The paper 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 multiproduct environment which will be of interest to a broad cross-section of professionals ranging from theorists to practising financial and production managers.