Activity Based Costing: Method of recognizing activities in the organization and allotment of cost of each activity thereto is known as activity based costing. To define: Activity levels associated with activity based costing. Solution: Activity based costing represents an approach of monitoring cost in accordance with the activities. This method generally uses number of units of related activity as cost driver to calculate overhead cost. Four types of activity levels are associated with activity based costing which are, Unit level activities- These activities are completely connected with the each particular unit of product. Batch level activities- These activities are related to the individual batch or group. Product level activities- These activities are associated with the product elevation. Facility level activities- These types of activities contains such activities which improves or provides ease to the customers of related product. Hence, activity level completes or supports the product.

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