Question
Amazon Web Services (AWS) and Alibaba Cloud are prominent providers of cloud computing services. They allocate their overhead costs using activity-based costing (ABC) methods. Scenario:
Amazon Web Services (AWS) and Alibaba Cloud are prominent providers of cloud computing services. They allocate their overhead costs using activity-based costing (ABC) methods.
Scenario: AWS and Alibaba Cloud have identified two primary activities driving their overhead costs: server maintenance and data transfer.
Activity | Amazon AWS | Alibaba Cloud |
Server Maintenance | $150 million | $120 million |
Data Transfer | $100 million | $80 million |
Additionally:
- Total Servers (Amazon AWS): 200,000
- Total Servers (Alibaba Cloud): 150,000
- Total Data Transferred (Amazon AWS): 500 petabytes
- Total Data Transferred (Alibaba Cloud): 400 petabytes
Requirements:
- Calculate the overhead cost allocation rate per server for both Amazon AWS and Alibaba Cloud.
- Determine the overhead cost allocation rate per petabyte of data transferred for both companies.
- Analyze the differences in overhead cost allocation methods between Amazon AWS and Alibaba Cloud.
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Managerial Accounting An Introduction to Concepts Methods and Uses
Authors: Michael W. Maher, Clyde P. Stickney, Roman L. Weil
11th edition
1111571260, 978-1111571269
