Learning Objective 04-C1: Describe the four types of activities that cause overhead costs. The four types of activities that cause overhead costs are: (1) unit-level activities, (2) batch-level activities, (3) product-level activities, and (4) facility-level activities.

 Learning Objective 04-C1: Describe the four types of activities that cause overhead costs.

The four types of activities that cause overhead costs are: (1) unit-level activities, (2) batch-level activities, (3) product-level activities, and (4) facility-level activities. Unit-level activities are performed on each unit, batch-level activities are performed only on each group of units, and product-level activities are performed only on each product line. Facility-level activities are performed to sustain facility capacity and are not caused by any specific product. Understanding these types of activities can help in applying activity-based costing.

 

 

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