Activity-Based Costing (ABC) at Microsoft

• Values:

• Activity Cost Pools: Setup Costs $50,000, Processing Costs $100,000
• Cost Drivers: Number of setups, Machine hours
• Requirements:

0. Allocate costs to activities using ABC.
1. Discuss how ABC improves cost accuracy at Microsoft.
2. Analyze the benefits of using multiple cost drivers in ABC.
3. Recommend activity-based management strategies for Microsoft based on ABC results.