Arizona State University (ASU) ACC241 Uses of Accounting Information II Exam 2 Practice

Facility-level activities are those activities and associated costs that are incurred regardless of the number of units produced by a company. These costs are necessary for maintaining the overall facility and supporting the production process but do not directly correlate to the number of products manufactured. Examples include rent, utilities, and salaries of facility management.

In contrast, unit-level activities change with the production volume, as they are directly tied to each unit produced. Batch-level activities are related to groups of units produced together, and the costs vary based on the number of batches rather than the total number of units. Product-level activities are specific to distinct products and can incur costs that vary with the number of different products offered, but may still relate to production levels. Therefore, facility-level activities uniquely represent costs that remain constant, making them the correct choice in this context.