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the question asks which might be suitable cost unit within credit control department
(i) Telephone expense
(ii) Cheque received and processed
(iii) Customer account
(iv) Credit control manager’s salaryso the cost unit is 2 and 3 with this reason given “Both the telephone expense and the credit control manager’s salary are costs for the department, not potential cost units. A cost unit is a unit of product or service which has costs attached to it.”
i still dont quite get it whats the line that differentiate between these two, is this has anything to do with direct and indirect cost, but credit control is non production department.. kinda lost now
A cost unit is whatever it is you are calculating a unit cost for. In a production company it is obvious – a cost per unit produced.
In this example, since it is the credit control department it would be sensible to either calculate a cost per cheque received, or a cost per customer account.Have you watched my free lectures on this? The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
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