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ABC System Activities, Unit-Related, Batch-Related, and Product-Sustaining Activities

a) Describe the differences between unit-related, batch-related, and product-sustaining activities. Give one example of each type of activity.

b) Describe the difference between transaction drivers and duration drivers. When would one type be preferred over the other?

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a) When using ABC system, activities are grouped together in the same cost pool if they are performed at the same general activity level. Doing this can help management identify the appropriate activity because activity costs respond differently to various types of drivers which measure the amount of activity output being used by each individual product. Three of general activity levels ...

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