Unit-level activity definition
/What is a Unit-Level Activity?
A unit-level activity is an action that occurs whenever a unit is manufactured. This activity is a volume-based cost driver, since the amount that occurs will vary in direct proportion to the number of units produced. Direct materials and direct labor are associated with unit-level activities. In the cost hierarchy within an activity-based costing system, a unit-level activity is the lowest level. The cost hierarchy is as follows, beginning with the lowest level:
Unit-level activities
Customer-level activities
The costs associated with unit-level activities can be considered variable costs, since they change in direct proportion to changes in the associated units being produced.