Learning Objective $17-$C$1$: Describe the four types of activities that cause overhead costs.

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The four types of activities that cause overhead costs are:

$(1)$ unit$-$level activities,

$(2)$ batch$-$level activities,

$(3)$ product$-$level activities, and

$(4)$ facility$-$level activities.

Unit$-$level activities are performed on each unit, batch$-$level activities are performed only on each group of units, and product$-$level activities are performed only on each product line. Facility$-$level activities are performed to sustain facility capacity and are not caused by any specific product. Understanding these types of activities can help in applying activity$-$based costing. Select the correct type of activity from the drop down list.