INTRA-FIRM COMPARISON

INTRA-FIRM COMPARISON

Intra-firm comparison means comparison among different units/products/strategic business unit (SBU) of a firm.
This comparison is possible only when uniform costing methods and practices are being adopted by all units
and SBUs.

Intra firm comparison helps the management in identifying the units/Strategic SBUs which have not been performing as per the internal benchmark or standards achieved by other units SBUs. This comparison is difficult sometime when the firm is dealing in different product/sectors and their working conditions are significantly different.

Advantages of Intra-firm comparison: The main advantages of intra-firm comparison are:–

1. Such a comparison gives an overall view of the firm as a whole to the owner or stakeholders and gives a comparative view of different product/different business of the firm.

2. It helps a SBU in knowing its strengths or weaknesses in relation to others SBUs.

3. It develops cost consciousness among units of the firm.