Concept introduction:
Unit-level activities:
The activities that are carried out at the time of the production of each unit are considered as unit-level activities. The unit-level cost should be proportional to the number of units produced.
Batch-level activities:
The activities that are carried out at the processing of a batch are considered as batch-level activities. These activities are carried out on the batch −level regardless of the number of units in a batch.
Product-level activities:
The activities that are carried out for a specific product are considered as a product-level activity. Product-level activities do not consider the batch quantity and number of units.
Organization-sustaining activities:
The activities that are carried out for running the organization, regardless of the customer influence and number of the batch unit are considered as organization-sustaining activities.
Categorize the given activities as unit-level, batch-level, product-level, or organization-sustaining activity.
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Chapter 5 Solutions
MANAGERIAL ACCOUNTING FOR MANAGERS AC
- On December 31, Swift Sports decided to sell one of its pitching machines. The initial cost of the equipment was $265,000 with accumulated depreciation of$178,000. Depreciation has been taken up to the end of the year. The company found a buyer willing to purchase the equipment for $42,000. What is the amount of the gain or loss on this transaction?arrow_forwardPlease explain the solution to this general accounting problem with accurate explanations.arrow_forwardKL Manufacturing produces a single component for sale. The component sells for $25 per unit. Fixed costs are $1,850,000 annually. Production and sales of 750,000 units annually result in profit before taxes of $3,400,000. What is the unit variable cost?arrow_forward
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