CMA Foundation · Fundamentals of Financial and Cost Accounting · Cost, Cost Centre, Cost Unit and Cost Drivers
Which of the following is an example of a cost that is ascertained for a cost unit rather than a cost centre?
Cost per tonne of cement is cost ascertained for a cost unit, since the tonne is the unit of product measured. The maintenance department, canteen and stores section are locations or functions for which costs are accumulated, so they are cost centres.
- ACost per tonne of cement producedCorrect
- BTotal cost of the maintenance department
- CTotal cost of the canteen
- DTotal cost of the stores section
Explanation
A cost unit is a unit of product or service for which cost is ascertained, such as a tonne of cement. Maintenance, canteen and stores are locations or functions, so they are cost centres.
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