After reading Chapter 7 and reviewing the online videos, you should have a good understanding of activity-based costing and its benefits and drawbacks. You learned that the benefits of increased accuracy under activity-based costing may not always outweigh the costs.

Much like the rest of the chapters, this one focused more specifically on activity-based costing for a manufacturing company. Do you think that activity-based costing is also appropriate for service-oriented activities? What kinds of service-oriented activities might activity-based costing benefit? In the materials there is a specific example provided about Western River Expeditions and their river rafting trips. Think of another service-oriented business and provide examples of unit-level costs and batch-level costs.