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What is the definition of: 1. Cost 2. Cost units

What is the definition of:
1. Cost
2. Cost units

Answers

Wilfred
1. - This may be defined as: The amount of expenditure (actual or notional) incurred on, or attributable to, a specified thing or activity.
- At the simplest level, cost includes two components, quantity used and price, ie, Cost = quantity used x price

2. - The cost unit to be used in any given situation is that which is most relevant to the purpose of the cost ascertainment exercise. This means that in any one organization numerous cost units may be used for particular parts of the organization or for differing purposes.
- The main elements of costs are:
a) Raw material this usually form a high proportion of the total cost of production
b) Labour
c) Overheads
Wilfykil answered the question on August 5, 2019 at 07:58

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