Service cost units
You'll learn how to identify and calculate appropriate cost units for service businesses, which is essential for accurately pricing your services and understanding true profitability.
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In this lesson
- 0:00 Cost units in service businesses
- 0:52 Why simple cost units don't work
- 2:03 Introduction to composite cost units
- 3:25 Composite cost units explained
- 4:25 Delivery company worked example
- 6:51 Calculating cost per kilogram kilometre
About this lesson
Unlike manufacturing, service businesses often have non-uniform outputs—different customers require different resources—so a simple cost per unit rarely works. This lesson shows you how to build composite cost units (like cost per guest per night or cost per kilogram per kilometre) that reflect the complexity of your service delivery, using worked examples from hotels, delivery companies, and training providers to demonstrate the practical application.
Duration: 8m
Transcript
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