a.
Concept Introduction:
Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.
To explain: The effect of an increase in activity level on average fixed costs per unit.
b.
Concept Introduction:
Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.
To explain: The effect of an increase in activity level on variable costs per unit.
c.
Concept Introduction:
Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.
To explain: The effect of an increase in activity level on total fixed costs.
d.
Concept Introduction:
Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.
To explain: The effect of an increase in activity level on total variable costs.
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