Activity-Based Cost Hierarchy

Notes

Activity-Based Cost Hierarchy

  1. Unit level

    Production of a single unit of product (Volume Related)

    Cost Example: Direct Materials

  2. Batch level

    A group of things being made in a single production run

    Cost Example: Number of Set ups

  3. Product (or service) Sustaining level

    Development, production and sale of individual product (so not volume related)

    Cost Example: Product Marketing

  4. Facility Sustaining level

    Maintaining the Organisation 

    Cost Example: Building depreciation and maintenance

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