Question

How can the company achieve the requirements of breaking out the costs of the applications running on Amazon EC2 instances and allocating them to the relevant departments?

1) By using tags to label the applications and departments and then using cost allocation tags to track the costs
2) By manually calculating the costs for each application and department
3) By using separate VPCs for each department and tracking the costs individually
4) By using AWS Cost Explorer to analyze the costs and allocate them to the relevant departments

Answer 1

A company can use tagging with cost allocation tags or AWS Cost Explorer to efficiently break out and allocate EC2 costs to relevant departments. Both methods provide insights and accurate cost tracking without the complexities of manual calculations or separate VPCs.

Step-by-step explanation:

To achieve the requirements of breaking out the costs of applications running on Amazon EC2 instances and allocating them to the relevant departments, a company can use one or a combination of methods. However, the most efficient approach would involve:

1. Using tags to label the applications and departments, and then using cost allocation tags to track the costs. This allows direct association of costs with specific resources and organizational divisions.
2. Using AWS Cost Explorer to analyze the costs and allocate them to the relevant departments. Cost Explorer provides detailed insights into AWS spending and usage patterns over time, helping in accurate cost allocation.

While using separate VPCs can separate charges, the overhead may allude to inefficiencies, and manual calculation isn't scalable for larger or more complex environments.