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Composite cost unit

A composite cost unit combines two or more service dimensions to provide a meaningful basis for unit cost. Examples include passenger-kilometres, which combine the number carried and distance, or occupied bed-days, which combine capacity used and time. Calculate the total service units consistently before dividing costs. It improves comparability only when other differences in service quality and conditions are understood.

Worked example

A bus carries 40 passengers for 25 kilometres, providing 1,000 passenger-kilometres. Relevant journey cost of $300 is $0.30 per passenger-kilometre.

Common mistake

Do not use vehicle-kilometres when the report asks for passenger-kilometres, or multiply incompatible measures without explaining the service relationship.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA MA Direct September 2026–June 2027
FIA FMA Direct September 2026–June 2027