CA Intermediate · Cost and Management Accounting · Service Costing
In service costing for a power generating company, which unit is typically used to measure the cost per unit of service?
The kilowatt-hour is the usual cost unit for a power generating company, since electricity output is measured and billed in kWh. Bed-day suits hospitals, room-day suits hotels, and passenger-km suits passenger transport, so none of those fits power supply.
- AKilowatt-hourCorrect
- BBed-day
- CRoom-day
- DPassenger-km
Explanation
Electricity supply is measured and sold in kilowatt-hours, so cost per kWh is the cost unit. Bed-day relates to hospitals, room-day to hotels, and passenger-km to transport.
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