ECONOMICS

COST ACCOUNTING

STANDARD COSTING AND VARIANCE ANALYSIS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which of the following would be the most appropriate cost unit for a distribution company?
A
Miles Travelled
B
Tonnes Carried
C
Tonne Miles
D
Packages Delivered Per Driver
Explanation: 

Detailed explanation-1: -The cost unit for Goods transport organization is Ton– Kilometer – that means cost of carrying one Ton of goods over a distance of one kilometer.

Detailed explanation-2: -Cost Unit is defined as: (a) Unit of quantity of product, service or time in relation to which costs may be ascertained or. expressed.

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: -In the hotel industry, the composite unit will be room/day.

There is 1 question to complete.