Activity-Based Costing (ABC) at Facebook

• Values:

• Total Overhead Costs: $20,000,000
• Cost Driver Units: 1,000,000
• Number of Activities: 8
• Activity Cost Pools: Setup, Customer Service, Quality Control
• Requirements:

0. Allocate overhead costs using the ABC method for Facebook.
1. Compare ABC with traditional costing methods in terms of cost allocation accuracy.
2. Analyze the cost per unit using ABC and its implications for pricing decisions.
3. Recommend improvements in cost allocation practices based on ABC findings.