Facebook, Inc. implements activity-based costing (ABC) for its advertising services division. In February 2040, the company identifies the following cost drivers and activities:

• Advertising Campaign Hours: 100,000 hours
• Customer Support Hours: 30,000 hours
• Overhead Costs: $15,000,000

Requirements:

• Allocate overhead costs using activity-based costing.
• Calculate the cost per activity.
• Prepare a cost allocation report.
• Analyze the benefits of using ABC over traditional costing methods.
• Recommend process improvements based on ABC analysis.