In activity-based costing (ABC) systems, an activity refers to any operation performed within an organization that causes costs to be incurred. Examples include processing an order, writing a letter, designing a product, and visiting a customer. This concept is integral to accurately allocating costs based on actual activities.
Batch-level activities refer to tasks or processes that are performed each time a batch of units is produced, regardless of the number of units within that batch. These activities are essential for economies of production, particularly in manufacturing settings.
