Problem 1: Computations and analysis are part of the allocation process. So is an organization's understanding of activities, identification of appropriate activities, a system for tracking, and using the information. Let's try to apply ABC to Netflix and provide the CFO with some advice.
Problem 2: Provide a list of five of the company's most important (indirect cost-causing) activities and briefly discuss each item.
Problem 3: Identify drivers of those activities, bearing in mind that it must be easy to measure and record the values of the drivers. Do you see any potential benefit in implementing ABC for Netflix?
Problem 4: What are some common issues that lead to unsuccessful implementation of ABC in an organization?
Problem 5: Prepare a memo to the CFO that identifies the activities and drivers, with brief explanations why these activities are the most critical, and why the drivers are appropriate and measurable.