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.
Provide an example of the activity measure for the given activities.
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Chapter 6 Solutions
Managerial Accounting for Managers
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