Batch Level Activity
What is a Batch Level Activity?
A batch-level activity is an activity involved in the manufacture of a batch of goods.
How it Works
In manufacturing, products are made in batches.
Raw materials are taken out of inventory and pass through a series of stations where they are processed.
This process continues until the batch is completed.
After this, the production machines are set up for a new product —and the process starts over.
A batch-level activity is an activity involved in this process.
For example, the manufacturer may use a series of machines in the process.
Setting up these machines is an example of a batch-level activity.
The machines are set up for the current batch, only.
Maintenance is another batch level activity.
Quality assurance is yet another batch level activity.
All of these activities can be assigned as direct costs to the total batch.
Batch level activity is just one of the activities involved in an activity based costing system.
© R.J. Hickman 2020