Significance of Activity in the Material Cost element.

Hi All,

I am trying to understand the significance of the Activity in defining the material cost element and here are the steps I followed.

Step 1) I have defined an activity and associated a cost type and total cost ,say $11.00 , to that activity.

Step 2) The user guide says that the activity basis type can only be used with the "Material Overhead" subelement.
If that is the case, when I define a subelement, say XYZ, for the "Material" cost element (not overhead cost element), what is the significance of the default activity field there?  I provided the default activity as Travel and basis type I can only provide Item/Lot (no activity).