CMA Foundation · Fundamentals of Financial and Cost Accounting · Classification of Costs (CAS 1)
A hospital computes its cost per patient-day. Under CAS 1 terminology, 'patient-day' is an example of a:
Patient-day is a cost unit because it is the unit of service in terms of which the hospital measures and expresses its costs. A cost centre is a department or location, and prime cost is a category of cost, so neither describes it.
- ACost unitCorrect
- BCost centre
- CCost driver only for materials
- DPrime cost
Explanation
A cost unit is a unit of product, service or time in terms of which costs are measured. Patient-day is a unit of service for a hospital. A cost centre is a location or department, and prime cost is a cost classification, not a measuring unit.
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