Unit-level activity

A unit-level activity is an action that occurs whenever a unit is manufactured. This activity is a volume-based cost driver, since the amount that occurs will vary in direct proportion to the number of units produced. In the cost hierarchy within an activity-based costing system, a unit-level activity is the lowest level. The cost hierarchy is:

  1. Unit-level activities
  2. Batch-level activities
  3. Product-level activities
  4. Customer-level activities
  5. Organization-sustaining activities