- A
Use cost allocation tags to tag resources with a department tag.
Tags can be activated in AWS Cost Explorer to group costs.
- B
Use Amazon CloudWatch custom metrics to record department IDs.
Why wrong: CloudWatch does not integrate with cost allocation.
- C
Use service control policies (SCPs) to restrict costs per account.
Why wrong: SCPs do not track costs.
- D
Use AWS Budgets to create budgets per department.
Why wrong: Budgets do not map costs; they set thresholds.
Question 261 of 1,746
Cost Allocation Tags
This SAP-C02 practice question tests your understanding of design solutions for organizational complexity. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company uses AWS Organizations with consolidated billing. The finance team wants to track costs by department. Each department has its own AWS account. Which feature should be used to map costs to departments?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Use cost allocation tags to tag resources with a department tag.
Cost allocation tags allow you to tag AWS resources with metadata (e.g., department name) and then activate those tags in the AWS Billing and Cost Management console. Once activated, AWS generates cost reports that break down spending by those tags, enabling the finance team to map costs to each department's account. This is the native, recommended approach for cost attribution across accounts in AWS Organizations.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Use cost allocation tags to tag resources with a department tag.
Why this is correct
Tags can be activated in AWS Cost Explorer to group costs.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Use Amazon CloudWatch custom metrics to record department IDs.
Why it's wrong here
CloudWatch does not integrate with cost allocation.
- ✗
Use service control policies (SCPs) to restrict costs per account.
Why it's wrong here
SCPs do not track costs.
- ✗
Use AWS Budgets to create budgets per department.
Why it's wrong here
Budgets do not map costs; they set thresholds.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates confuse cost allocation tags with AWS Budgets or SCPs, mistakenly thinking that SCPs can limit costs or that Budgets can map costs, when in fact only tags provide the granular, reportable metadata needed for cost attribution.
Detailed technical explanation
How to think about this question
Cost allocation tags can be user-defined (e.g., Department:Finance) or AWS-generated (e.g., aws:createdBy). After activating tags in the Billing console, the Cost Explorer and AWS Cost and Usage Reports (CUR) include tag columns, enabling granular filtering and grouping. A subtle behavior: tags must be applied to resources before they are activated; retroactive tagging does not apply to past usage, so consistent tagging from resource creation is critical for accurate cost tracking.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
What to study next
Got this wrong? Here's your next step.
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FAQ
Questions learners often ask
What does this SAP-C02 question test?
Design Solutions for Organizational Complexity — This question tests Design Solutions for Organizational Complexity — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Use cost allocation tags to tag resources with a department tag. — Cost allocation tags allow you to tag AWS resources with metadata (e.g., department name) and then activate those tags in the AWS Billing and Cost Management console. Once activated, AWS generates cost reports that break down spending by those tags, enabling the finance team to map costs to each department's account. This is the native, recommended approach for cost attribution across accounts in AWS Organizations.
What should I do if I get this SAP-C02 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Same concept, more angles
2 more ways this is tested on SAP-C02
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A company is using AWS Organizations with consolidated billing. The finance team wants to track costs by business unit. Each business unit has its own AWS account. The team needs a solution that allows them to generate cost reports filtered by business unit without additional overhead. Which action should be taken?
easy- A.Use Cost Explorer to filter by linked account, which automatically groups by business unit.
- B.Use AWS Budgets to create budgets per account and manually aggregate.
- ✓ C.Apply tags to resources and enable cost allocation tags in Billing and Cost Management.
- D.Create a separate payer account for each business unit.
Why C: Option C is correct because applying tags to resources and enabling cost allocation tags in AWS Billing and Cost Management allows the finance team to categorize costs by business unit without additional overhead. Each business unit's AWS account can have resources tagged with a key like 'BusinessUnit', and once cost allocation tags are activated, Cost Explorer and cost reports can filter and group by these tags, providing automated cost tracking across accounts in AWS Organizations.
Variation 2. A company is using AWS Organizations with consolidated billing. They want to track costs by department, where each department has its own AWS account. Which service should they use to tag resources with department IDs and view cost breakdowns?
easy- A.AWS Budgets with tag-based filters.
- B.AWS Trusted Advisor cost optimization checks.
- C.AWS Cost Explorer with tag-based filtering.
- ✓ D.AWS Cost Explorer with cost allocation tags.
Why D: Cost allocation tags in AWS allow you to tag resources (e.g., EC2 instances, S3 buckets) with department IDs and then use AWS Cost Explorer to view cost breakdowns by those tags. This directly meets the requirement to track costs per department account within AWS Organizations with consolidated billing.
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Last reviewed: Jul 4, 2026
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