Amazon.com, Inc. operates five distribution centers across different regions. The company's management wants to allocate...
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Accounting
Amazon.com, Inc. operates five distribution centers across different regions. The company's management wants to allocate overhead costs to each distribution center accurately to evaluate their performance. The cost accountant gathered extensive data on various cost drivers, including facility size, number of orders processed, and miles traveled for delivery. Additionally, Amazon.com employs a complex system for tracking indirect costs related to utilities, maintenance, and administrative expenses. The total overhead costs for the period amounted to $5,000,000. Develop a comprehensive cost allocation methodology that considers the unique characteristics of each distribution center and propose performance measurement metrics to assess the efficiency and effectiveness of their operations.
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