Activity-Based Costing (ABC) at Amazon

• Values:

• Cost Pools: Ordering Costs, Setup Costs, Customer Service Costs
• Activity Drivers: Number of Orders, Number of Setups, Number of Customer Calls
• Total Overhead Costs: $1,000,000
• Requirements:

0. Implement an ABC system to allocate overhead costs at Amazon.
1. Calculate the overhead cost per unit based on ABC allocations.
2. Analyze the benefits of ABC in improving cost accuracy at Amazon.
3. Recommend ways to enhance cost management using ABC.