Product-level activity definition
/What is a Product-Level Activity?
A product-level activity is an action taken in support of a specific product or activity. These actions are taken irrespective of the amount of production or service volume associated with a product. Thus, a business might not produce any units of a new product at all, and yet will still incur product-level activities. For this reason, product-level activities can be considered sunk costs.
Within the cost hierarchy in an activity-based costing system, product-level activities are positioned near the middle, as noted in the following hierarchy listing:
Product-level activities
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Examples of Product-Level Activities
Examples of product-level activities are the cost of the product manager for a product, the cost to design a product, the cost to design product packaging, the cost to issue an engineering change order, and the cost to advertise a product.