Activity-Based Costing at Facebook

Values:

• Total Overhead: $7,000,000
• Activity 1: 50,000 units, $2,500,000
• Activity 2: 70,000 units, $4,500,000

Requirements:

1. Allocate the overhead costs using activity-based costing.
2. Determine the cost per unit for each activity.
3. Compare these costs to traditional costing methods.
4. Discuss the advantages of using ABC in Facebook.