CIMA BA2 · Chapter 1 · Question 11 of 12
A haulage company charges customers according to both the weight carried and the distance travelled. Which of the following is the most suitable COMPOSITE cost unit for this business?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Tonne-kilometre
Explanation
A composite cost unit combines two measures of activity. Since the work done depends on both the weight carried and the distance travelled, cost per tonne-kilometre is the most meaningful unit. A vehicle or driver is a cost centre or resource, and fuel is an input cost.
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