Product-level activity definition

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What is a 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. 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 AccountingTools Courses

Activity-Based Costing

Activity-Based Management

Cost Accounting Fundamentals

Examples of Product-Level Activities

Examples of product-level activities are the cost of the product manager for a product, the cost to design a product, the cost to design product packaging, the cost to issue an engineering change order, and the cost to advertise a product.