When combining activities in an activity-based costing system, batch-level activities should be combined with unit-level activities whenever possible

Question

Quizplus · Accepted Answer

Batch-level activities are related to costs incurred every time a batch is produced, regardless of the size of the batch, while unit-level activities vary with the number of units produced. Combining them would distort the cost information, as their cost drivers are fundamentally different.

When Combining Activities in an Activity-Based Costing System, Batch-Level Activities