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

Related Courses

Activity-Based Costing
Cost Accounting Fundamentals