Q.What is meant by Cost Unit? Give examples of cost units used in four different industries.

Once cost has been collected at a cost centre, it needs to be expressed in a form that allows comparison across time and across firms — that is what a cost unit does.

A Cost Unit is a unit of quantity of a product, service, or time in relation to which cost is ascertained or expressed. The unit chosen naturally depends on the nature of the output — for example, cement and sugar are costed per tonne, cloth is costed per metre, electricity is costed per kilowatt-h …

A Cost Unit is a unit of quantity of a product, service, or time in relation to which cost is ascertained or expressed. While a cost centre identifies WHERE a cost is incurred, a cost unit provides the yardstick in which the resulting cost is finally stated, so that costs can be compared meaningfully across periods and across competing firms in the same industry.

The cost unit selected depends entirely on the nature of the product or service, as the following examples show:

Students sometimes give a monetary figure (e.g. "₹500") as an example of a "cost unit" — a cost unit is the UNIT OF MEASUREMENT of output (per tonne, per metre), not a rupee amount. K …