When combining activities in an activity-based costing system, batch-level activities should be combined with unit-level activities whenever possible.

Batch-Level Activities

Activities that are performed each time a batch of goods is handled or processed, regardless of how many units are in the batch. The amount of resource consumed depends on the number of batches run rather than on the number of units in the batch.

Unit-Level Activities

Tasks or processes that vary directly with the number of units produced or services provided.