AT&T Inc. provides telecommunications services using operating costing. In October 2037, the company incurs $90,000,000 in costs allocated as follows:

• Network Maintenance: $40,000,000
• Customer Service: $30,000,000
• Sales and Marketing: $20,000,000

Requirements:

• Classify each cost as direct or indirect.
• Perform cost control analysis.
• Prepare a cost allocation schedule using activity-based costing.
• Analyze the impact of cost control measures on profitability.
• Provide recommendations for cost reduction and efficiency improvement.