Which level of activity-based costing involves general factory administration?

The correct choice is indeed associated with facility-level activity-based costing. This level of costing encompasses the overarching costs that are incurred for the overall operation of the facility. General factory administration costs, for instance, do not directly link to the production of individual units, batches, or specific products but rather represent the necessary overhead costs that support the entire facility's ability to operate.

Facility-level activities typically include costs for management, maintenance of the plant, and utilities that are necessary for the entire factory's function, regardless of how many products are produced or batches are made. Understanding this distinction is crucial as it helps businesses allocate costs more accurately, leading to better pricing and profitability analysis.

In contrast, product-level, unit-level, and batch-level activities are more specific in nature. Product-level costs pertain to costs incurred for specific products regardless of the number of units or batches produced. Unit-level costs are associated with producing each individual unit of product, while batch-level costs relate to the costs incurred when a group or batch of products is processed together. Each of these categories serves distinct functions in cost management, reinforcing the significance of recognizing facility-level administration as a separate and vital component in the broader context of activity-based costing.