distribution of products. Within each function, a number of activities may be distinguished and a principal driver
identified for each activity.
Each sales order will normally comprise a number of batches of any one of a range of products. The company is active
in promoting, where possible, a product focus for design, dedicated production lines and product marketing. It also
recognises that a considerable level of expenditure will relate to supporting the overall business operation.
It is known that many costs may initially be recognised at the unit, batch, product sustaining (order) or
business/facility sustaining (overall) levels. A list of expense items relating to Order Number 377 of product Zeta is
shown below. The methods of calculating the values for Order Number 377 shown below are given in brackets
alongside each expense item. These methods also indicate whether the expense items should be regarded as product
unit, batch, product sustaining (order) or business/facility sustaining (overall) level costs. The expense items are not
listed in any particular sequence. Each expense item should be adjusted to reflect its total cost for
Order Number 377.
Order Number 377 comprises 5,000 units of product Zeta. The order will be provided in batches of 1,000 product
units.