CIMA P2 Syllabus A. Managing The Costs Of Creating Value - Activity-Based Cost Hierarchy - Notes ^{3 / 11}

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