What is cost unit, Managerial Accounting

Assignment Help:

What is Cost unit

While the cost centres assists in ascertaining costs by location, person, equipment, operation or process, cost unit is a unit of product, service or a combination of them in relation to which costs are ascertained or expressed.

A cost unit is defined as by the CIMA, London as a "unit of product or service in relation to which the costs are ascertained". The selection of suitable cost unit depends upon several factors such as, nature of business, process of information, requirements of costing system, etc but are usually relates to the natural unit of the product or service. For example, in steel, the cost unit is Tonne while in transportation services the unit may be passenger Kilometre or Tonne Km. Etc. it may be noted that while the former is a single cost unit, the latter is a composite unit a combination of the tow units.

 


Related Discussions:- What is cost unit

Accounting method, Accounting Method is the method by which income and expe...

Accounting Method is the method by which income and expenses are accounted for taxation purposes. The Internal Revenue Service needs taxpayers to select an accounting method that p

Use of budgetary controls, Use of Budgetary controls Budgetary controls...

Use of Budgetary controls Budgetary controls are used for the following reasons: 1) To state the objectives of the organization as a whole. 2) To reveal the extent by whi

Industrial Grinders, accepted#Regarding the Overhead costs, these are alloc...

accepted#Regarding the Overhead costs, these are allocated based on Direct Labor;

Stock-out costs, Stock-out costs These are the opportunity costs of run...

Stock-out costs These are the opportunity costs of running out of stock. They comprise: 1) The costs of lost customer sales, and therefore lost contribution to fixed costs.

Job order costing, a cost-allocation base may be any of the following excep...

a cost-allocation base may be any of the following except: a. cost driver b. cost pool c. way to link indirect cost to a cost object d. nonfinancial quantity

Cost estimation, engineering method of cost estimation

engineering method of cost estimation

Relevant cost, what are characteristics of relevant cost?

what are characteristics of relevant cost?

Procedure of material acquisition, Procedure of material acquisition A ...

Procedure of material acquisition A stores record is maintained into which the quantity and value of materials received is entered. Issues of materials to production are made b

What are the categories of zero base budgeting, Categories of zero base bud...

Categories of zero base budgeting The preceding discussion will reveal that zero base budgeting is based primarily on: 1) Development of decision units 2) Identification

Advantages of transfer pricing, Advantages of Transfer Pricing (a) Tran...

Advantages of Transfer Pricing (a) Transfer pricing is similar to cost apportionment and allocation in that values of one department are passed to another. For cost apportionme

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd