Activity Levels

Facility-level

Activities carried out regardless of which type of products are produced, how many batches are run, or how many units are made.

Facility level activity measure

Direct labor hours *Facility-level costs cannot be traced on a cause and effect basis to individual products.

Facility level activity

General factory administration Plant building and grounds Cafeteria for factory workers

Product Level activity measure

Hours of testing time Number of part types Hours of design times

Unit-Level Activity measures

Machine hours Direct labor hours Units produced

Batch-level activities

Processing purchase orders processing production orders Setting up equipment Handling material

Unit-level Activities

Processing units on machines Processing units by hand Consuming factory supplies

Batch-level activity measures

Purchase orders processed production orders processed Number of setups; setup hours Pounds of material handled; number of times material moved

Product-level

Specific products and typically must be carried out regardless of how many batches or units of the product manufactured

Batch-level

performed each time a batch is handled or processed

Unit-level

performed each time a unit is produced. The costs of unit-level activities should be proportional to the number of units produced.

Product-level activities

testing new products administering parts inventories Designing products