The correct answer is: C. a unit of production or service in relation to which costs are ascertained.
A cost unit is a unit of production or service in relation to which costs are ascertained. It is used to measure the cost of producing or providing a product or service. The cost unit can be a physical unit, such as a piece of product, or a time unit, such as a labor hour.
The cost unit is important because it allows businesses to track their costs and make decisions about how to improve their profitability. By understanding the costs associated with each unit of production or service, businesses can identify areas where costs can be reduced.
Option A is incorrect because the cost per machine hour is not a unit of production or service. It is a measure of the cost of using a machine for one hour.
Option B is incorrect because the cost per labor hour is not a unit of production or service. It is a measure of the cost of using labor for one hour.
Option D is incorrect because a measure of work output in a standard hour is not a unit of production or service. It is a measure of the amount of work that can be done in one hour.