Batch-Level Activities

AAA

DEFINITION of 'Batch-Level Activities'

In managerial accounting, production costs that are incurred only when a new batch is processed. These costs might include things like set-up time, moving materials and loading machines. For these costs, it does not matter how many units are produced in the batch.

INVESTOPEDIA EXPLAINS 'Batch-Level Activities'

It is important to understand by which manner costs are incurred for two primary reasons. First, when financial managers understand that certain costs are incurred by batch, they may choose to run larger batches in order to minimize cost. Second, understanding the batch cost allows managerial accountants to more accurately assign production costs to end products. This makes a product profitability analysis more accurate.

RELATED TERMS
  1. Activity Sequence-Sensitive

    A calculation used in activity-based costing for determining ...
  2. Overhead Rate

    In managerial accounting, a cost added on to the direct costs ...
  3. Activity-Based Budgeting - ABB

    A method of budgeting in which the activities that incur costs ...
  4. Activity-Based Management - ABM

    A procedure that originated in the 1980s for analyzing the processes ...
  5. Unit Cost

    The cost incurred by a company to produce, store and sell one ...
  6. Activity-Based Costing - ABC

    An accounting method that identifies the activities that a firm ...
Related Articles
  1. Markets

    Is Growth Always A Good Thing?

    Getting big quickly looks good, but companies can get into trouble when they do it too fast. Find out how to spot this trouble.
  2. Entrepreneurship

    Getting To Know Business Models

    Learning how to assess business models helps investors identify companies that are the best investments.
  3. Markets

    Get Tough On Management Puff

    Company managers are often skilled at fooling investors. Be critical and don't believe the hype.
  4. Markets

    Buying Into Corporate Research & Development (R&D)

    Investors take note: companies that cut research and development are in danger of saving today but losing big tomorrow.
  5. Options & Futures

    Governance Pays

    Learn about how the way a company keeps its management in check can affect the bottom line.
  6. Fundamental Analysis

    What is the first day of the third quarter?

    Learn when the first day of the third quarter begins. Explore how reported financial results may have a profound impact on the price of shares.
  7. Fundamental Analysis

    What is the difference between revenue and sales?

    Learn to distinguish between a company's revenue and its sales, and see why the distinction is important when analyzing a company's financial performance.
  8. Investing Basics

    What does the end of the quarter mean for portfolio management?

    Take a deeper look at why the end of a financial quarter, and all of its accompanying reports, is a significant event for portfolio management.
  9. Fundamental Analysis

    What is the difference between revenue and profit?

    Understand the difference between revenue and profit, two key concepts in business accounting, including where each can be found on an income statement.
  10. Delivery duty paid (DDP) is a shipping term.
    Investing

    What does DDP Mean?

    Delivery duty paid (DDP) is a shipping term specifying that the seller is responsible for all costs associated with delivery of the goods to the buyer. It is usually used when goods are exported ...

You May Also Like

Hot Definitions
  1. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
  2. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  3. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  4. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  5. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  6. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
Trading Center