ECONOMICS

Detailed explanation-1: -Cost Unit is defined as Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed. A cost unit refers to the unit of quantity of product, service or time (or combination of these) in relation to which costs may be ascertained or expressed.

Detailed explanation-2: -As per The Chartered Institute of Management Accountants, London, a unit of cost as “a unit of product or service in relation to which we ascertain costs”. A cost unit is a device for the purpose of breaking up or separating costs into smaller sub-divisions.

Detailed explanation-3: -Unit cost is determined by combining the variable costs and fixed costs and dividing by the total number of units produced.

Detailed explanation-4: -Answer. CIMA defines a cost centre as “a location, a person, or an item of equipment (or a group of them) in or connected with an undertaking, in relation to which costs ascertained and used for the purpose of cost control”. Cost centres are of two types-Personal and Impersonal Cost Centre.

Detailed explanation-5: -The unit cost is the price incurred by a company to produce, store and sell one unit of a particular product. Unit costs include all fixed costs and all variable costs involved in production. Cost unit is a form of measurement of volume of production or service.