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Sir, the lecture is very helpful.
but I still couldn’t analyse the cost units of the cases.
Like,
1. The overtime premium incurred at the specific request of a customer.
2. The hire of a tool for a specific job.
Since both are direct costs(which can be traced directly to the cost units), what is the cost units of them?
Could you please specifically tell me how to analyse the cost units, cuz it’s necessary to identify the direct costs and indirect costs.
( Or, maybe I still couldn’t get the meaning of cost unit.)
Thank you, Sir.
Hope u don’t mind me getting lots of questions,lol
🙂 Have a nice day, Sir.The cost unit is whatever it is that we are wanting to get the cost of.
Usually it refers to situations where we are producing lots of similar units. For example, if we are making lost of identical cars then the cost unit would be a car.
Here, we are costing a specific job. So the cost unit would be the specific job (although we don’t usually refer to it as a cost unit in that situation).
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