Identification of Costs in Relation to the Relevant Divisions Glaser Health Products is organized into three main divisions. The three include operations, sales, and administrative. According Gary and Sorinel (2010), each of these divisions is associated with a set of functions. The success of business operations at Glaser Health Products depends on the interaction between the various organs. To this end, it is noted that the three divisions have their own unique roles contributing towards the running of the organization. For effective financial and operations management, each of the departments is assigned a number of cost categories (see appendix 1). Appendix 1 is an illustration of the specific cost classifications associated with the respective functions of each of the departments mentioned above. Costing and cost analysis are carried out in relation to the functions of a given department. For instance, the category referred to as “supplies to the office” falls under the administrative division (see appendix 1). According to Gary and Sorinel (2010), this form of grouping is needed to ensure that resources available to the firm are properly utilized. As a result, it is easy to keep track of the costs incurred by each of the departments. Activity Based Costing at Glaser Health Products The functions of a company are enhanced once the respective cost groupings are clustered according to the respective categories identified by the management. Prabhu, Booth, Teemu, and Brown (2009) propose that activity based costing is suitable for such situations. The parameters used in this form of costing at Glaser Health Products are grouped on the basis of the following levels:  1. Unit level activities.  2. Batch level activities.  3. Product level activities.  4. Facility level activities. Appendix 1 illustrates the basis on which the activities are categorized. In light of this, it is noted that the cost clusters can be ranked on the strength of specific activities. According to Gary and Sorinel (2010), the functions mentioned above are essential to the operations of the firm. They ensure that the budgetary allocations are properly and clearly outlined (see appendix 2 below). Appendix 2 is an indication of the proposed clustering of the activities using the format of activity levels. The classification is conducted in relation to the divisions at Glaser Health Products. Gary and Sorinel (2010) hold the opinion that each division in the company is characterized by the 4 factors highlighted above. The activity levels give each department a structured approach to costing. Glaser Health: Appropriate Cost Driver It is noted that unit level activity requires a volume based cost driver. Gary and Sorinel (2010) support these sentiments by arguing that the units produced determine the amount of activity involved. The two (units produced and level of activity) are seen to be directly proportional. According to Gary and Sorinel (2010), batch level activity comes into play when a new consignment of items is produced by the company. To this end, the appropriate cost driver would be related to the set-up time (Gary & Sorinel, 2010). Product level activity is based on the production of a given commodity. The relationship between activity and production remains regardless of the nu