PHARMA

1. Cost Unit:
 Definition: A cost unit is a unit of product or service for which costs
are calculated. In the case of a pharmaceutical company, the cost unit
could be a specific medication or drug.
 Example: Let's consider a specific drug, "MediCure," which is produced
by the pharmaceutical company. The production, distribution, and
marketing costs associated with manufacturing each unit of MediCure
form the cost unit.
2. Cost Centre:
 Definition: A cost centre is a location, person, or item of equipment for
which costs are accumulated. It is a segment of the organization to
which costs can be attributed.
 Example: Various departments within the pharmaceutical company can
be considered cost centers. For instance, the Research and
Development (R&D) department, Production department, and
Marketing department could all be separate cost centers. Costs related
to each department, such as research costs, production costs, and
marketing costs, are attributed to these respective cost centers.
3. Profit Unit:
 Definition: A profit unit is a unit or segment of the business for which
profits are calculated. It is a subset of the organization that contributes
to the overall profitability.
 Example: In the pharmaceutical company, a profit unit might be a
specific product line or therapeutic category. For instance, the
"CardioCare" product line, which includes medications for
cardiovascular health, could be considered a profit unit. The
profitability of this unit is evaluated based on the revenue generated
from the sales of CardioCare products minus the associated costs.
4. Profit Centre:
 Definition: A profit centre is a segment of the organization for which
both costs and revenues are measured. It is a unit that is responsible
for both its costs and the revenue it generates.
 Example: If the pharmaceutical company has different divisions for
manufacturing different types of drugs (e.g., antibiotics, pain relievers),
each division can be considered a profit center. The profitability of each
division is assessed by considering both the costs incurred (production,
marketing, distribution) and the revenue generated by that specific
division.
PRODYCTION

1. Cost Unit:
 Definition: A cost unit is a unit of product or service for which costs
are calculated. It is the basis for measuring and assigning costs.
 Illustration: In XYZ Manufacturing Company, the cost unit can be a
specific product, such as a smartphone. The costs associated with
producing each smartphone (direct materials, direct labor, and
overhead) are calculated to determine the cost per unit.
2. Cost Centre:
 Definition: A cost centre is a location, person, or item of equipment for
which costs are accumulated. It is a segment of the organization to
which costs can be attributed.
 Illustration: In XYZ Manufacturing Company, various departments can
be considered cost centers. For instance, the assembly department, the
machining department, and the quality control department can all be
separate cost centers. Costs related to each department are tracked to
assess the efficiency and performance of that specific segment.
3. Profit Unit:
 Definition: A profit unit is a unit or segment of the business for which
profits are calculated. It is a subset of the organization that contributes
to the overall profitability.
 Illustration: In XYZ Manufacturing Company, a profit unit could be a
specific product line, such as smartphones. The profitability of the
smartphone product line is assessed by considering both the costs
incurred in producing smartphones and the revenue generated from
their sales.
4. Profit Centre:
 Definition: A profit centre is a segment of the organization for which
both costs and revenues are measured. It is a unit that is responsible
for both its costs and the revenue it generates.
 Illustration: If XYZ Manufacturing Company has different divisions for
manufacturing different types of products (e.g., smartphones, tablets,
smartwatches), each division can be considered a profit center. The
profitability of each division is evaluated by considering both the costs
associated with that division and the revenue generated by the sale of
its products.

MANUFACUTRING

Illustration: Manufacturing Company

1. Cost Unit:
  Definition: A cost unit is a unit of product or service for which costs
are calculated. It is the basis for measuring and assigning costs.
 Example: In a manufacturing company, the cost unit could be a
specific product or a batch of products. For instance, if the company
produces chairs, each chair or a batch of chairs can be considered a
cost unit.
2. Cost Center:
 Definition: A cost center is a location, person, or item of equipment for
which costs are accumulated. It is a segment of the organization to
which costs can be attributed.
 Example: Within the manufacturing facility, different departments such
as the assembly line, the painting department, and the maintenance
department can be considered cost centers. Each department incurs
costs, and those costs are allocated to the respective cost center.
3. Profit Unit:
 Definition: A profit unit is a unit or segment of the business for which
profits are calculated. It is a subset of the organization that contributes
to the overall profitability.
 Example: If the manufacturing company has different product lines,
such as chairs and tables, each product line can be considered a profit
unit. The profitability of each product line is assessed by considering
both the costs incurred and the revenue generated by that specific
product line.
4. Profit Center:
 Definition: A profit center is a segment of the organization for which
both costs and revenues are measured. It is a unit that is responsible
for both its costs and the revenue it generates.
 Example: If the manufacturing company has different divisions, such as
the chair division and the table division, each division can be
considered a profit center. The chair division is responsible for its costs
(direct materials, labor, and overhead) and the revenue generated from
selling chairs.

In summary, in a manufacturing company, the cost unit is typically the product or

batch of products, cost centers are the different departments involved in the
production process, profit units are the different product lines, and profit centers are
the different divisions responsible for both costs and revenues. These concepts help
organizations analyze and manage their financial performance at various levels of
granularity.

MOBILE

1. Cost Unit:
  Definition: A cost unit is a unit of product or service for which costs
are calculated. In the context of a mobile phone manufacturing
company, the cost unit is the individual mobile phone.
 Example: Each mobile phone produced by the company is a cost unit.
The costs associated with manufacturing, materials, labor, and other
expenses are calculated for each individual mobile phone.
2. Cost Centre:
 Definition: A cost centre is a location, person, or item of equipment for
which costs are accumulated. In the mobile phone manufacturing
company, various departments can be considered cost centres.
 Example: The assembly line, quality control department, and research
and development department can be identified as cost centres. Each of
these departments accumulates costs related to its specific functions.
3. Profit Unit:
 Definition: A profit unit is a unit or segment of the business for which
profits are calculated. In the case of a mobile phone manufacturing
company, different product lines or models can be considered profit
units.
 Example: The company may have different product lines, such as basic
phones, smartphones, and flagship models. Each product line is a profit
unit, and the profitability of each is evaluated separately.
4. Profit Centre:
 Definition: A profit centre is a segment of the organization for which
both costs and revenues are measured. It is a unit that is responsible
for both its costs and the revenue it generates.
 Example: If the mobile phone manufacturing company has different
divisions for manufacturing different types of phones (e.g., basic
phones division, smartphone division), each division can be considered
a profit centre. The profitability of each division is assessed by
considering both the costs incurred and the revenue generated by that
specific division.

In summary, in the context of a mobile phone manufacturing company, the cost unit
is each individual mobile phone, cost centres include departments like assembly,
quality control, and research and development, profit units are different product lines
(basic phones, smartphones), and profit centres are divisions responsible for
manufacturing specific types of phones. These concepts help the company
understand and manage costs, revenues, and profits at various levels of detail within
the organization.