We will learn how activity-based costing differs from the traditional cost accounting methods. Activity-based costing estimates the costs of the resources consumed by cost objects, such as products and customers; cost objects generate activities that consume costly resources. Activities form the link between costs and cost objects. The first step in the implementation of activity-based costing includes defining the activities, activity cost pools, and activity measures. The number and definitions of the activity cost pools and activity measures used by companies vary considerably. We will also learn how to use time-driven activity-based costing to assign costs to cost objects and to analyze capacity. Knowledge Check 01 Shipping orders to a grocery store would be considered a(n) _________blank. multiple choice unit-level activity batch-level activity product-level activity customer-level activity organization-sustaining activity