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Activity and Output From Business Perspective

The word ‘activity’ will be used in this textbook as a general description to cover any physical operation that takes place in an enterprise. In a business providing bus transport for schoolchildren the activities will include driving the bus, cleaning the bus, making telephone calls to check routes and times, and ensuring that the administrative requirements, such as insurance and licenses, are in place. In an NGO department providing assistance to elderly persons, the activities will include sending out home helps, paying the home helps, telephoning the clients to arrange visits and checking that spending is within the budget allowed. In a product manufacturing business providing floor-cleaning machines the activities will include ordering parts, assembling parts, delivering the finished products to shops for sale, taking in returns for repair under warranty, paying employees and checking on the quality of the goods produced. These are all activities and they all cause costs to be incurred. The activities causing costs is central to much of the partition of costs and the collection of costs relating to a specific activity.

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