A cost unit is a quantitative unit of product or service in relation to which costs are ascertained. The costs incurred during a period are duty collected, analysed and expressed in terms of cost unit. The selection of proper unit is not an easy task because service organizations provide a wide variety of services. It becomes difficult to define the cost unit. The unit may be simple or composite depending upon the nature of service organizations. Below is the list of cost units used by a representative group of service organizations:
|
Types of Services Organizations/Departments |
Cost Unit |
|
1. Good transport (public carriers, trucks, good trains, etc) |
per tonne-km or quintal-km |
|
2. Passenger transportation (bus, railway) |
per passenger-km |
|
3. Power generation and distribution (electricity boards) |
per kilowatt hour |
|
4. Hospitals |
per patient-bed day, per operation |
|
5. Hotels |
per room per day bed nights, etc. |
|
6. Canteens |
per number of staff, per meals served, etc. |
|
7. Water supply |
per kilolitres |
|
8. Boiler houses |
per kg of steam supplied |
|
9. Road maintenance |
per km of road maintained |
|
10. Captive power generation unit |
per kilowatt hours |
|
11. Consulting firms |
per client hours |
|
12. Computer department |
per computer time provided to user departments |
|
13. Machinery maintenance |
per maintenance hours spent in user departments |