Fairfield Manufacturing incurred the following costs during 2011 to produce its high-quality precision instruments. The company used an activity-based costing system and identified the following activities.

1. Inspection of each batch produced.

2. Salaries of receiving clerks.

3. Setup for each batch produced.

4. Insurance on production facilities.

5. Depreciation on manufacturing equipment.

6. Materials handling.

7. Inventory storage. 

Required

a. Classify each activity as a unit-level, batch-level, product-level, or facility-level activity.

b. Identify an appropriate cost driver (allocation base) for each activity.