An activity measure is a way to measure the amount of work done in a particular activity.

Simple Meaning:

It shows how much an activity is performed.

Examples:

Number of machine setups

Number of purchase orders

Number of inspection hours

Number of units produced

Purpose:

Activity measures are used in Activity-Based Costing (ABC) to assign costs accurately to products or services.

Example:

If the activity is “Inspection,” the activity measure may be the number of inspection hours.

In short, an activity measure tells us how much of an activity is carried out.