Product-level activity

A product-level activity is an action taken in support of a specific product or activity. These actions are taken irrespective of the amount of production or service volume associated with a product. Examples of product-level activities are:

  • Cost of the product manager for a product
  • Cost to design a product
  • Cost to design product packaging
  • Cost to issue an engineering change notice
  • Cost to advertise a product

Within the cost hierarchy in an activity-based costing system, product-level activities are positioned near the middle, as noted in the following hierarchy listing:

  1. Unit-level activities 
  2. Batch-level activities 
  3. Product-level activities 
  4. Facility-level activities 

Related Courses

Cost Accounting Fundamentals