COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Any activity or factor that causes costs to be incurred
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a quantitative unit of product or service in which costs are ascertained
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A location or function of an organization in respect of which costs are ascertained
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Amount expenditure incurred on specified cost object
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Detailed explanation-1: -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-2: -Unit cost is determined by combining the variable costs and fixed costs and dividing by the total number of units produced.
Detailed explanation-3: -noun. a quantity or unit of a product or service whose cost is computed, used as a standard for comparison with other costs.
Detailed explanation-4: -Simple Unit: These use a single standard or unit of measurement of the goods manufactured (e.g., per piece, per kilogram, per quintal, per ton, per gallon, or per meter). Composite Unit or Complex Unit: These combine two simple units (e.g., per passenger-kilometer, per ton-kilometer, or per kilowatt-hour).
Detailed explanation-5: -Solution(By Examveda Team) A cost unit is a unit of production or service in relation to which costs are ascertained. 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.