Batch-Level Activities

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.

BREAKING DOWN '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. Batch Processing

    Processing transactions in a group or batch. No user interaction ...
  2. Batch Trading

    An accumulation of orders that are executed simultaneously. Batch ...
  3. Batch Header Record

    A standard record of information regarding the transfer of a ...
  4. Activity Cost Pool

    In managerial accounting, a set of costs which are incurred when ...
  5. Full Costing

    A managerial accounting method that describes when all fixed ...
  6. Production Cost

    A cost incurred by a business when manufacturing a good or producing ...
Related Articles
  1. Economics

    Understanding Marginal Cost of Production

    Marginal cost of production is an economics term that refers to the change in production costs resulting from producing one more unit.
  2. Economics

    What is Managerial Accounting?

    Managerial accounting is internally-based accounting that helps managers measure the results of their decisions.
  3. Economics

    What Are The Different Types Of Costs In Cost Accounting?

    Cost accounting measures several different types of costs associated with a company’s production processes.
  4. Economics

    Explaining Activity-Based Costing

    Activity-based costing (ABC) is a managerial accounting method that assigns certain indirect costs to the products incurring the bulk of those costs.
  5. Term

    What is Incremental Cost?

    Incremental cost is the added cost of manufacturing one more unit.
  6. Economics

    Understanding Cost of Revenue

    The cost of revenue is the total costs a business incurs to manufacture and deliver a product or service.
  7. Fundamental Analysis

    Explaining Capitalized Cost

    A capitalized cost is an expense associated with a fixed asset that is added to the basis of that asset and expensed over its depreciable life.
  8. Economics

    What is the Cost of Funds?

    Cost of funds is the interest cost financial institutions pay to use the funds they deploy in their business.
  9. Economics

    Explaining Prime Cost

    Prime cost is a way of measuring the total cost of the production inputs needed to create a given output.
  10. Investing

    Examining Costs Of Goods Sold (COGS)

    Learn more about the costs that go into production.
RELATED FAQS
  1. How is the economic order quantity model used in inventory management?

    Understand what types of costs make up total inventory costs, and learn how the economic order quantity model is used to ... Read Answer >>
  2. What are common concepts and techniques of managerial accounting?

    Understand the difference between managerial accounting and financial accounting. Learn about the common concepts and techniques ... Read Answer >>
  3. What are common scenarios in which managerial accounting is appropriate?

    Understand the difference between managerial accounting and financial accounting. Learn common scenarios in which managerial ... Read Answer >>
  4. What is prime cost in managerial accounting?

    Learn about prime costs in managerial accounting such as direct material cost, labor and wages cost, and other direct costs ... Read Answer >>
  5. What are the differences between period costs and product costs?

    Find out why GAAP separates all company expenses into either period or production costs and how this impacts the way expenses ... Read Answer >>
  6. How are fixed costs treated in cost accounting?

    Learn how fixed costs and variable costs are used in cost accounting to help a company's management in budgeting and controlling ... Read Answer >>
Hot Definitions
  1. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  2. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  3. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  4. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  5. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  6. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
Trading Center