Chapter 7, Problem 6E

To determine

Concept introduction:

Activity-based costing: Activity-based costing method is also called the ABC method, it is a method for determining accurate costs. The reasons that the managers allocate overhead costs to products are to provide information for internal decision-making, to promote the efficient use of resources, and to comply with cost accounting standards.

To classify: The activities are at the unit level, batch level, product level, customer level, or organization sustaining activity.