Unit cost is a method of costing used in those industries which are engaged in manufacturing exclusively one homogeneous product or a few grades of the same product. It is also referred to as single/ output costing. The examples of industries in which this type of costing is applicable are cement, paper, sugar, steel, quarries, breweries etc. The unit cost is the average cost, i.e., the total cost divided by the number of units produced. The unit cost may be expressed in terms of number, weight, volume and time, etc. The following is a list of some industries and the corresponding cost units adopted by them:
Type of Industry Cost Unit
Steel Manufacture per tonne
Cement, Coal per tonne
Paper per kg-tonne
Brick making 1,000 bricks made
Paint manufacture per litre
Gas works per 1,000 cubic metres produced
Electricity undertakings per kilowatt hour
No comments:
Post a Comment