Diagram for Cost Components

Which diagram is most suitable for showing components of cost in a factory?

Correct Answer Explanation

A pie diagram or component bar diagram is most suitable for showing components of cost in a factory.

Key Points:

• Cost components (raw materials, labour, overhead, etc.) are parts of total cost.
• Pie diagrams show the proportional share of each component.
• Component bar diagrams show the same data as stacked bars.
• Both are ideal for representing how a whole is divided into parts.

Why Other Options Are Wrong

• A. Simple bar diagram: Shows comparison but not the composition relationship.
• B. Frequency polygon: Used for frequency distributions, not cost composition.
• D. Histogram: Used for continuous frequency data, not cost breakdowns.