Activity-Based Costing (ABC) at Microsoft

• Values:

• Activity Cost Pools: Setup Costs $100,000, Processing Costs $200,000
• Cost Drivers: Number of setups, Machine hours
• Requirements:

0. Allocate costs to activities using ABC principles.
1. Discuss the advantages of ABC over traditional costing methods at Microsoft.
2. Analyze how ABC enhances cost accuracy and decision-making.
3. Recommend ABC implementation strategies for optimizing cost management.