Cost Classification. Classifying each of the costs of activities below as either unit-level, batch-level, product-level, customer-level, or organization-sustaining activities. For clarity, customers are retail stores, products are specific sizes/colors of leashes/collars or stain removers, a batch is a specific order from a customer or a production run made for inventory, and units are individual leashes, collars, or quarts of stain removers. Put an X in the appropriate category. (Note: One category per line item.)
	Unit-Level	Batch-Level	Product-Level	Customer-Level	Org-Sustaining
Perform assembly work on collars
A retail store is billed for all products delivered during the month
Make a sales call to an existing pet supplies store to drop off new marketing materials and further the relationship to maintain their business
Manage inventory levels of the base components and other chemicals used in the stain remover
Interview candidates for an open position in the human resources department
Equipment is set up to change colors to run red colors in size Small
Electricity is used to run industrial equipment
Ethics training provided to all company employees
A design change is made in the stain remover
Issue a purchase order for a specific job

Finally, answer this one question:

Why would a company use activity-based costing? Explain the circumstances and purposes of using this method, and state whether or not it should be used for external reporting.

Answer rating: 100% (QA)

Here is the classification of costs for the activities provided UnitLevel Perform assembly work on collars Equipment is set up to change colors to run red colors in size Small Electricity is used to r... View the full answer