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Cost Allocation at Amazon Values: Total Overhead Costs: $1,000,000 Allocation Base: Number of Orders Orders Processed: 100,000 Requirements: Allocate overhead costs using the number of
Cost Allocation at Amazon
- Values:
- Total Overhead Costs: $1,000,000
- Allocation Base: Number of Orders
- Orders Processed: 100,000
- Requirements:
- Allocate overhead costs using the number of orders as the base.
- Calculate the overhead cost per order for Amazon.
- Discuss the challenges in cost allocation for e-commerce companies.
- Recommend improvements in Amazon’s cost allocation methods.
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