CA Intermediate · Cost and Management Accounting · Service Costing
Which one of the following is a composite cost unit commonly used in service costing for a goods transport undertaking?
Tonne-kilometre is the composite cost unit for a goods transport undertaking because it combines two measures, the weight carried in tonnes and the distance travelled in kilometres. The other options each use only one measure, so they are simple units.
- APer kilometre
- BTonne-kilometreCorrect
- CPer vehicle
- DPer driver
Explanation
A composite unit combines two measures. Tonne-kilometre combines weight carried and distance travelled. Per kilometre, per vehicle and per driver are each a single measure and so are simple units.
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