AWS Cloud Practitioner > Cost Management > Flashcards

Cost Management Flashcards

Interpret cost-related AWS services such as Budgets, Cost Explorer, and the Pricing Calculator. (33 cards)

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1
Q

Which task can a user complete using the AWS Cost Management tools?

  1. Delete all of your AWS resources with a single click.
  2. Create budgets and receive notifications if current or forecasted usage exceeds the budgets.
  3. Launch either EC2 Spot instances or On-Demand instances based on the current pricing.
  4. Move data stored in Amazon S3 Standard to an archiving storage class to reduce cost.
A

2. Create budgets and receive notifications if current or forecasted usage exceeds the budgets.

The AWS Cost Management tools includes services, tools, and resources to organize and track cost and usage data, enhance control through consolidated billing and access permissions, enable better planning through budgeting and forecasts, and further lower costs with resources and pricing optimizations.

  • Create budgets and receive notifications if current or forecasted usage exceeds the budgets is also a correct answer.
  • Delete all of your AWS resources with a single click is incorrect. This can be done using third party tools, but not natively through the console.
  • Launch either EC2 Spot instances or On-Demand instances based on the current pricing is incorrect. The cost management tools do not integrate with the tools used to launch EC2 instances and cannot choose the best pricing plan.
  • Move data stored in Amazon S3 Standard to an archiving storage class to reduce cost is incorrect. This is performed using lifecycle management in Amazon S3, it is not a task performed by cost management tools.

Reference:
Cloud Financial Management with AWS

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2
Q

A company uses Amazon EC2 instances to run applications that are dedicated to different departments. The company needs to break out the costs of these applications and allocate them to the relevant department. The EC2 instances run in a single VPC.

How can the company achieve these requirements?

  1. Enable billing access for IAM users and view the costs in Cost Explorer.
  2. Enable billing alerts through Amazon CloudWatch and Amazon SNS.
  3. Create tags by department on the instances and then run a cost allocation report.
  4. Add additional Amazon VPCs and launch each application in a separate VPC.
A

3. Create tags by department on the instances and then run a cost allocation report.

The company should create cost allocation tags that specify the department and assign them to resources. These tags must be activated so they are visible in the cost allocation report. Once this is done and a monthly cost allocation report has been configured it will be easy to monitor the costs for each department.

  • Enable billing access for IAM users and view the costs in Cost Explorer is incorrect. Cost explorer will not show a breakdown of the costs by department.
  • Enable billing alerts through Amazon CloudWatch and Amazon SNS is incorrect. A billing alert simply lets you know you have reached a cost threshold.
  • Add additional Amazon VPCs and launch each application in a separate VPC is incorrect. This will not help as billing is not broken out by VPC so they will not be able to determine the costs per department using this method.

Reference:
Using the monthly cost allocation report

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3
Q

A company is deploying a new workload and software licensing requirements dictate that the workload must be run on a specific, physical server.

Which Amazon EC2 instance deployment option should be used?

  1. Dedicated Instances
  2. Spot Instances
  3. Reserved Instances
  4. Dedicated Hosts
A

4. Dedicated Hosts

An Amazon EC2 Dedicated Host is a physical server fully dedicated for your use, so you can help address corporate compliance requirements. Amazon EC2 Dedicated Hosts allow you to use your eligible software licenses from vendors such as Microsoft and Oracle on Amazon EC2, so that you get the flexibility and cost effectiveness of using your own licenses, but with the resiliency, simplicity and elasticity of AWS

  • Dedicated Instances is incorrect. With dedicated instances you are not given a specific physical server to run your instances on.
  • Spot Instances is incorrect. This deployment option does not provide a specific physical server.
  • Reserved Instances is incorrect. This deployment option does not provide a specific physical server.

Reference:
Amazon EC2 Dedicated Hosts

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4
Q

What can a Cloud Practitioner use to categorize and track AWS costs by project?

  1. Cost Allocation Tags
  2. AWS Trusted Advisor
  3. Consolidated billing
  4. Multiple accounts
A

1. Cost Allocation Tags

Cost allocation tags can be used to tag and categorize your resources and then run view the billing in Cost Explorer and the cost allocation report. For example you can tag your resources by department or project and then view costs attributed to the resources used by those groups.

  • AWS Trusted Advisor is incorrect. This service advises you on best practices for provisioning resources.
  • Consolidated billing is incorrect. Consolidated billing will give you usage per account but not per project.
  • Multiple accounts is incorrect. You do not need to split your usage across multiple accounts, you can instead use cost allocation tags.

Reference:
Organizing and tracking costs using AWS cost allocation tags

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5
Q

A company plans to use reserved instances to get discounted pricing for Amazon EC2 instances. The company may need to change the EC2 instance type during the one year period.

Which instance purchasing option is the MOST cost-effective for this use case?

  1. Standard Reserved Instances
  2. Convertible Reserved Instances
  3. Zonal Reserved Instances
  4. Regional Reserved Instances
A

2. Convertible Reserved Instances

A convertible reserved instance enables you to exchange one or more Convertible Reserved Instances for another Convertible Reserved Instance with a different configuration, including instance family, operating system, and tenancy.

  • Standard Reserved Instances is incorrect. With standard RIs you cannot change the instance type but you can change the instance size.
  • Regional Reserved Instances is incorrect. Regional RIs apply to instance usage within any AZ in a specified Region.
  • Zonal Reserved Instances is incorrect. Zonal RIs apply to instance usage within a specific AZ within an AWS Region.

Reference:
Reserved Instances for Amazon EC2 overview

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6
Q

A user needs to identify underutilized Amazon EC2 instances to reduce costs.

Which AWS service or feature will meet this requirement?

  1. AWS CodeBuild
  2. AWS Trusted Advisor
  3. AWS Cost Explorer
  4. AWS Health Dashboard
A

2. AWS Trusted Advisor

AWS Trusted Advisor offers a rich set of best practice checks and recommendations across five categories: cost optimization, security, fault tolerance, performance, and service limits.

The Trusted Advisor low utilization Amazon EC2 instances check, checks the Amazon Elastic Compute Cloud (Amazon EC2) instances that were running at any time during the last 14 days and alerts you if the daily CPU utilization was 10% or less and network I/O was 5 MB or less on 4 or more days.

  • AWS CodeBuild is incorrect. CodeBuild is used for compiling and testing code ahead of deployment.
  • AWS Cost Explorer is incorrect. Cost Explorer can be used to view itemized costs but you cannot check resource utilization.
  • AWS Health Dashboard is incorrect. This dashboard will not warn you about underutilization of resources.

Reference:
AWS Trusted Advisor check reference

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7
Q

AWS are able to continue to reduce their pricing due to:
1. Pay-as-you go pricing
2. The AWS global infrastructure
3. Economies of scale
4. Reserved instance pricing

A

3. Economies of scale

By using cloud computing, you can achieve a lower variable cost than you can get on your own. Because usage from hundreds of thousands of customers is aggregated in the cloud, providers such as AWS can achieve higher economies of scale, which translates into lower pay as-you-go prices.

  • The AWS global infrastructure is incorrect. The global infrastructure is the basis of the AWS platform but it is not the reason prices continue to reduce.
  • Pay-as-you go pricing is incorrect. This pricing model is a benefit but not the reason unit prices are reducing.
  • Reserved instance pricing is incorrect. This pricing model results in savings for customers in specific areas but not the reason for the overall reduction in prices.

Reference:
Six advantages of cloud computing

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8
Q

Which on-premises costs must be included in a Total Cost of Ownership (TCO) calculation when comparing against the AWS Cloud?

(Select TWO.)

  1. Physical compute hardware
  2. Operating system administration
  3. Network infrastructure in the data center
  4. Project management services
  5. Database schema development
A

1. Physical compute hardware
3. Network infrastructure in the data center

When performing a TCO analysis you must include all costs you are currently incurring in the on-premises environment that you will not pay for in the AWS Cloud. This should include labor costs for activities that will be reduced or eliminated. Labor costs that will continue to be incurred in the cloud need not be included.

  • Operating system administration is incorrect. You don’t need to include these costs as you will continue to incur them in the AWS Cloud.
  • Project management services is incorrect. You don’t need to include these costs as you will continue to incur them in the AWS Cloud.
  • Database schema development is incorrect. You don’t need to include these costs as you will continue to incur them in the AWS Cloud.

Reference:
AWS Pricing/TCO Tools

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9
Q

Which of the following tasks can a user perform to optimize Amazon EC2 costs?

(Select TWO.)

  1. Implement Auto Scaling groups to add and remove instances based on demand.
  2. Create a policy to restrict IAM users from accessing the Amazon EC2 console.
  3. Set a budget to limit spending on Amazon EC2 instances using AWS Budgets.
  4. Purchase Amazon EC2 Reserved Instances.
  5. Create users in a single Region to reduce the spread of EC2 instances globally.
A

1. Implement Auto Scaling groups to add and remove instances based on demand.
4. Purchase Amazon EC2 Reserved Instances.

Cost optimization can include using Auto Scaling groups to scale the number of EC2 instances according to actual demand. Also, using Amazon EC2 reserved instances for suitable workloads is a good way of optimizing costs over the longer term.

  • Create a policy to restrict IAM users from accessing the Amazon EC2 console is incorrect. This is not an optimization strategy; it will just prevent access completely which could be going too far.
  • Set a budget to limit spending on Amazon EC2 instances using AWS Budgets is incorrect. You can use AWS Budgets to notify you of spend but not to actually limit spend.
  • Create users in a single Region to reduce the spread of EC2 instances globally is incorrect. You cannot create users in a single Region, all IAM Users are global.

Reference:
Cost Optimization with AWS

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10
Q

Which service can a Cloud Practitioner use to configure custom cost and usage limits and enable alerts for when defined thresholds are exceeded?

  1. Consolidated billing
  2. AWS Trusted Advisor
  3. Cost Explorer
  4. AWS Budgets
A

4. AWS Budgets

AWS Budgets allows you to set custom budgets to track your cost and usage. With AWS Budgets, you can choose to be alerted by email or SNS notification when actual or forecasted cost and usage exceed your budget threshold, or when your actual RI and Savings Plans’ utilization or coverage drops below your desired threshold.

  • Consolidated billing is incorrect. This is associated with AWS Organizations and provides a single bill across multiple member accounts.
  • AWS Trusted Advisor is incorrect. This service provides guidance on AWS best practices.
  • Cost Explorer is incorrect. This service is used for exploring the costs incurred within your account.

Reference:
AWS Budgets

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11
Q

What can a Cloud Practitioner do with the AWS Cost Management tools?

(Select TWO.)

  1. Automatically terminate AWS resources if budget thresholds are exceeded.
  2. Delete all of your AWS resources with a single click.
  3. Create budgets and receive notifications if current or forecasted usage exceeds the budgets.
  4. Launch either EC2 Spot instances or On-Demand instances based on the current pricing.
  5. Move data stored in Amazon S3 Standard to an archiving storage class to reduce cost.
A

1. Automatically terminate AWS resources if budget thresholds are exceeded.
3. Create budgets and receive notifications if current or forecasted usage exceeds the budgets.

Within the AWS Budgets service you can use AWS Budgets Actions to automatically terminate certain resources. Create budgets and receive notifications if current or forecasted usage exceeds the budgets is also a correct answer.

  • Delete all of your AWS resources with a single click is incorrect. This can be done using third party tools,
  • Launch either EC2 Spot instances or On-Demand instances based on the current pricing is incorrect. The cost management tools do not integrate with the tools used to launch EC2 instances and cannot choose the best pricing plan.
  • Move data stored in Amazon S3 Standard to an archiving storage class to reduce cost is incorrect. This is performed using lifecycle management in Amazon S3, it is not a task performed by cost management tools.

Reference:
Cloud Financial Management with AWS

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12
Q

Which AWS service or feature allows a company to receive a single monthly AWS bill when using multiple AWS accounts?

  1. Consolidated billing
  2. Amazon Cloud Directory
  3. AWS Cost Explorer
  4. AWS Cost and Usage report
A

1. Consolidated billing

You can use the consolidated billing feature in AWS Organizations to consolidate billing and payment for multiple AWS accounts or multiple Amazon Internet Services Pvt. Ltd (AISPL) accounts. Every organization in AWS Organizations has a master (payer) account that pays the charges of all the member (linked) accounts.

  • Consolidated billing has the following benefits:
    • One bill: You get one bill for multiple accounts.
    • Easy tracking: You can track the charges across multiple accounts and download the combined cost and usage data.
    • Combined usage: You can combine the usage across all accounts in the organization to share the volume pricing discounts, Reserved Instance discounts, and Savings Plans. This can result in a lower charge for your project, department, or company than with individual standalone accounts.
    • No extra fee: Consolidated billing is offered at no additional cost.
  • Amazon Cloud Directory is incorrect. Cloud Directory is used for creating cloud-native directories. This is not related to billing.
  • AWS Cost Explorer is incorrect. AWS Cost Explorer has an easy-to-use interface that lets you visualize, understand, and manage your AWS costs and usage over time. It does not centralize billing.
  • AWS Cost and Usage report is incorrect. The AWS Cost & Usage Report lists AWS usage for each service category used by an account and its IAM users in hourly or daily line items, as well as any tags that you have activated for cost allocation purposes.

Reference:
Consolidating billing for AWS Organizations

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13
Q

What can a Cloud Practitioner use the AWS Total Cost of Ownership (TCO) Calculator for?

  1. Generate reports that break down AWS Cloud compute costs by duration, resource, or tags
  2. Estimate savings when comparing the AWS Cloud to an on-premises environment
  3. Estimate a monthly bill for the AWS Cloud resources that will be used
  4. Enable billing alerts to monitor actual AWS costs compared to estimated costs
A

2. Estimate savings when comparing the AWS Cloud to an on-premises environment

The TCO calculators allow you to estimate the cost savings when using AWS, compared to on-premises, and provide a detailed set of reports that can be used in executive presentations. The calculators also give you the option to modify assumptions that best meet your business needs.

  • Generate reports that break down AWS Cloud compute costs by duration, resource, or tags is incorrect. This describes the AWS Cost & Usage Report.
  • Estimate a monthly bill for the AWS Cloud resources that will be used is incorrect. This describes the AWS Pricing Calculator (or Simple Monthly Calculator).
  • Enable billing alerts to monitor actual AWS costs compared to estimated costs is incorrect. Billing alerts can be enabled using Amazon CloudWatch.

Reference:
AWS Pricing Calculator

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14
Q

Which of the statements below is correct in relation to Consolidated Billing?

(Select TWO.)

  1. You receive one bill per AWS account
  2. You receive a single bill for multiple accounts
  3. You pay a fee per linked account
  4. You can combine usage and share volume pricing discounts
  5. You are charged a fee per user
A

2. You receive a single bill for multiple accounts
4. You can combine usage and share volume pricing discounts

  • Consolidated billing has the following benefits:
    • One bill: You get one bill for multiple accounts.
    • Easy tracking: You can track the charges across multiple accounts and download the combined cost and usage data.
    • Combined usage: You can combine the usage across all accounts in the organization to share the volume pricing discounts and Reserved Instance discounts. This can result in a lower charge for your project, department, or company than with individual standalone accounts.
  • You receive one bill per AWS account is incorrect as you receive a single bill for multiple accounts.
  • You pay a fee per linked account is incorrect as you do not pay a fee.
  • You are charged a fee per user is incorrect as you do not pay a fee.

Reference:
Consolidating billing for AWS Organizations

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15
Q

A company needs to use third-party software for its workload on AWS.
Is there a feature or service of AWS that the company can use to purchase the software?

  1. AWS Resource Access Manager
  2. AWS Managed Services
  3. AWS License Manager
  4. AWS Marketplace
A

4. AWS Marketplace

AWS Marketplace is a curated digital catalog that makes it easy for organizations to discover, procure, entitle, provision, and govern third-party software. You can find thousands of software listings from popular categories like security, business applications, and data & analytics, and across specific industries, such as healthcare, financial services, and public sector.

  • AWS Managed Service is incorrect as this describes services in which AWS customers don’t have to provision their own infrastructure.
  • AWS License Manager is incorrect as it is a service that makes it easier for you to manage Software Licenses.
  • AWS Resource Access Manager is incorrect as it is a service that helps you to securely share your resources across AWS accounts, within your organization or organizational units (OUs) within AWS and has nothing to do with third party services.

Reference:
AWS Marketplace

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16
Q

How can an organization take advantage of tiered pricing across multiple business units within an organization?

  1. AWS Organizations service control policies (SCPs).
  2. AWS Organizations consolidated billing.
  3. All Upfront Reserved Instances.
  4. Cost Explorer utilization reports.
Study These Flashcards
A

2. AWS Organizations consolidated billing.

You can use the consolidated billing feature in AWS Organizations to consolidate billing and payment for multiple AWS accounts. This can be used for multiple business units within an organization.

  • Consolidated billing has the following benefits:
    • One bill: You get one bill for multiple accounts.
    • Easy tracking: You can track the charges across multiple accounts and download the combined cost and usage data.
    • Combined usage: You can combine the usage across all accounts in the organization to share the volume pricing discounts, Reserved Instance discounts, and Savings Plans. This can result in a lower charge for your project, department, or company than with individual standalone accounts.
    • No extra fee: Consolidated billing is offered at no additional cost.
  • Consolidated billing includes:
    • Paying Account: independent and cannot access resources of other accounts
    • Linked Accounts: all linked accounts are independent
  • AWS Organizations service control policies (SCPs) is incorrect. Service Control Policies set a limit of the maximum amount of permissions within Organizational Units (OUs) within AWS Organizations.
  • All Upfront Reserved Instances is incorrect, as Reserved Instances are an EC2 instance pricing option, which has nothing to do with billing an organization.
  • Cost Explorer utilization reports is incorrect. Cost Explorer does not allocate a billing strategy, and only shows billing information.

Reference:
Consolidating billing for AWS Organizations

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17
Q

A corporation with multiple departments each having their own AWS accounts wants to implement a solution to customize billing data to match their specific showback or chargeback business logic. They wish to group accounts with similar financial owners and generate a distinct Cost and Usage Report (CUR) for each group.

Which AWS service should they use to meet these requirements?

  1. AWS Budgets
  2. AWS Cost Explorer
  3. AWS Billing and Cost Management
  4. AWS Billing Conductor
Study These Flashcards
A

4. AWS Billing Conductor

AWS Billing Conductor is the correct answer because it is a customizable billing service that allows the organization to define billing groups, set pricing rules, create custom line items, and generate a unique Cost and Usage Report (CUR) for each billing group. This service would help the corporation to streamline and customize their billing data efficiently according to different business logics.

  • AWS Budgets is incorrect. AWS Budgets is incorrect because, while it allows organizations to set custom cost and usage budgets, it does not offer the extensive customization and grouping features that are central to the scenario described.
  • AWS Cost Explorer is incorrect. AWS Cost Explorer is incorrect because, although it helps in visualizing and managing AWS spending and usage over time, it doesn’t offer functionalities to create billing groups and set pricing rules at a granular level as described in the scenario
  • AWS Billing and Cost Management is incorrect. This answer is incorrect because, while it is a tool to track your AWS usage and expenditures, it doesn’t offer the specialized functionalities for creating billing groups and defining custom billing parameters as provided by AWS Billing Conductor.

Reference:
AWS Billing Conductor Features

18
Q

Which Amazon EC2 pricing model is the most cost-effective for an always-up, right-sized database server running a project that will last 1 year?

  1. On-Demand Instances
  2. Convertible Reserved Instances
  3. Spot Instances
  4. Standard Reserved Instances
Study These Flashcards
A

4. Standard Reserved Instances

Reserved Instances (RIs) provide you with a significant discount (up to 72%) compared to On-Demand instance pricing. Standard reserved instances offer the most cost savings. RIs are based on a 1 or 3 year contract so they are suitable for workloads that will run for the duration of the contract period.

  • Convertible Reserved Instances’’ is incorrect. You have the flexibility to change families, OS types, and tenancies while benefiting from RI pricing when you use Convertible RIs. However, this is not required for a right-sized server.
  • On-Demand Instances is incorrect. This pricing model offers not discounts.
  • Spot Instances is incorrect. Though you can achieve greater cost savings with Spot instances, the instances can be terminated when AWS need the capacity back.

Reference:
Amazon EC2 Reserved Instances

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19
Q

To gain greater discounts, which services can be reserved?

(Select TWO.)

  1. Amazon RedShift
  2. Amazon S3
  3. AWS Lambda
  4. Amazon DynamoDB
  5. Amazon CloudWatch
Study These Flashcards
A

1. Amazon RedShift
4. Amazon DynamoDB

Reservations provide you with greater discounts, up to 75%, by paying for capacity ahead of time. Some of the services you can reserve include: EC2, DynamoDB, ElastiCache, RDS, and RedShift.

  • Amazon S3 is incorrect. You cannot reserve Amazon S3, you pay for what you use.
  • AWS Lambda is incorrect. AWS Lambda is a service that provides functions and cannot be reserved.
  • Amazon CloudWatch is incorrect. You cannot reserve Amazon CloudWatch which is a monitoring service.

Reference:
How AWS Pricing Works

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20
Q

You have been running an on-demand Amazon EC2 instance running Linux for 4hrs, 5 minutes and 6 seconds. How much time will you be billed for?

  1. 5hrs
  2. 4hrs, 6mins
  3. 4hrs, 5mins, and 6 seconds
  4. 4hrs
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A

3. 4hrs, 5mins, and 6 seconds

On-demand, Reserved and Spot Amazon EC2 Linux instances are charged per second with a minimum charge of 1 minute. Therefore, as the minimum has been exceeded, exactly 4hrs, 5mins and 6 seconds will be charged.

Reference:
New – Per-Second Billing for EC2 Instances and EBS Volumes

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21
Q

Your CTO wants to move to cloud. What cost advantages are there to moving to cloud?

  1. You provision only what you need and adjust to peak load
  2. You can reduce your marketing costs
  3. You don’t need to pay for application licensing
  4. You get free data transfer into and out of the cloud
Study These Flashcards
A

1. You provision only what you need and adjust to peak load

One of the best benefits of cloud is that you can launch what you need to and automatically adjust your resources as demand changes. This means you only ever pay for what you’re using.

  • You can reduce your marketing costs is incorrect. You don’t reduce marketing costs when moving to the cloud, your organization still needs to do the same amount of marketing.
  • You don’t need to pay for application licensing is incorrect. It is not true that you don’t need to pay for application licensing in the cloud. You still pay for your application licenses when running on Amazon EC2.
  • You get free data transfer into and out of the cloud is incorrect. You do not get free bi-directional data transfer into and out of the cloud. AWS charge for outbound data transfer.

Reference:
AWS Pricing

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22
Q

A company has 50 different business units and requires that each business unit’s billing information is viewed separately.

What should a cloud practitioner recommend?

  1. Use separate AWS accounts for each business unit, then filter by unit using the coverage report.
  2. Place each business unit in a different AWS Region, then filter by unit in Cost Explorer.
  3. Tag each business unit’s resources, then filter by unit in Cost Explorer.
  4. Use a different VPC for each business unit, then filter by unit using an AWS Cost and Usage Report.
Study These Flashcards
A

3. Tag each business unit’s resources, then filter by unit in Cost Explorer.

By using Tags, you can apply metadata to application components aligning each component to an application. You can then filter based on these tags within AWS Cost Explorer to see easily how much each application costs. This is the easiest way to achieve the requirements out of the options.

  • Use separate AWS accounts for each business unit, then filter by unit using the coverage report is incorrect. The coverage report is a component of Savings Plans, which is a billing option for various services which applies discounts based on committed spend.
  • Place each business unit in a different AWS Region, then filter by unit in Cost Explorer is incorrect. This would work but is unnecessary. Regions are not designed to isolate applications and are simply different geographic parts of the AWS Global infrastructure. You may also want your applications to be in the same region for other reasons such as latency, compliance etc.
  • Use a different VPC for each business unit, then filter by unit using an AWS Cost and Usage Report is incorrect as this is also not necessary, and it is much easier to filter costs using tags.

Reference:
What is Tag Editor?

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23
Q

A company has a mission critical Linux-based application. The application must run every Monday from 6 AM until 10pm. As the application is critical, it cannot be interrupted.

Which Amazon EC2 instance purchasing option meets these requirements MOST cost-effectively?

  1. On-Demand Capacity Reservation with Savings Plan
  2. Spot Instances
  3. Regional Reserved Instances
  4. Dedicated Hosts
Study These Flashcards
A

1. On-Demand Capacity Reservation with Savings Plan

On-Demand Capacity Reservation with Savings Plan is ideal in this scenario as the application will have predictable running times (every Monday from 6am till 10pm). It is also mission critical, so reserving the capacity within an Availability Zone using On-Demand Capacity Reservation with Savings Plan makes perfect sense. The savings plans will also make this application cost-effective whilst still maintaining the guaranteed availability that you cannot get with spot instances.

  • Spot Instances is incorrect because although this will be the cheapest option, the application has been described as ‘Mission Critical’, and because spot terminations can happen at a two-minute notice, Spot would be unsuitable for this workload.
  • Regional Reserved Instances is incorrect because it does not give you the guaranteed service availability that On Demand Capacity reservations have, therefore it is wrong.
  • Dedicated Hosts is incorrect. An Amazon EC2 Dedicated Host is a physical server fully dedicated for your use, so you can help address corporate compliance requirements, and as it is a single server, is not durable by default. Therefore it is not suitable; for this mission-critical use case. Also it is too expensive to be used for workloads you need to be cost-effective.

Reference:
Reserve compute capacity with EC2 On-Demand Capacity Reservations

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24
Q

An organization is considering implementing a new workload in the AWS Cloud. However, the company first wants to forecast costs.

Which tool should the company use to estimate the cost of the workload?

  1. Cost Explorer.
  2. AWS Pricing Calculator.
  3. AWS Billing and Cost Management dashboard.
  4. AWS Cost and Usage Report.
Study These Flashcards
A

2. AWS Pricing Calculator.

AWS Pricing Calculator is a web-based planning tool that you can use to create estimates for your AWS use cases. You can use it to model your solutions before building them, explore the AWS service price points, and review the calculations behind your estimates. You can use it to help you plan how you spend, find cost saving opportunities, and make informed decisions when using Amazon Web Services.

  • Cost Explorer is incorrect. AWS Cost Explorer is a way to visualize your current spend across your accounts, and to forecast future spend. It does not help create estimates of how much money you would spend through building on the AWS platform.
  • AWS Billing and Cost Management dashboard is incorrect, as you cannot calculate estimates for Cloud based workloads within the console.
  • AWS Cost and Usage Report is incorrect. The AWS Cost and Usage Reports (AWS CUR) contains the most comprehensive set of cost and usage data available. You can use Cost and Usage Reports to publish your AWS billing reports to an Amazon Simple Storage Service (Amazon S3) bucket that you own and doesn’t show costs for new workloads.

Reference:
AWS Pricing Calculator

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25
Which AWS service should be used to create a billing alarm? 1. AWS Trusted Advisor 2. AWS CloudTrail 3. Amazon CloudWatch 4. Amazon QuickSight
**3.** Amazon CloudWatch ## Footnote You can monitor your estimated AWS charges by using Amazon CloudWatch. When you enable the monitoring of estimated charges for your AWS account, the estimated charges are calculated and sent several times daily to CloudWatch as metric data. Billing metric data is stored in the US East (N. Virginia) Region and represents worldwide charges. This data includes the estimated charges for every service in AWS that you use, in addition to the estimated overall total of your AWS charges. The alarm triggers when your account billing exceeds the threshold you specify. It triggers only when actual billing exceeds the threshold. It doesn't use projections based on your usage so far in the month. * AWS Trusted Advisor is incorrect. AWS Trusted Advisor is an online tool that provides you real time guidance to help you provision your resources following AWS best practices. * AWS CloudTrail is incorrect. CloudTrail logs API activity, not performance or billing metrics. * Amazon QuickSight is incorrect. Amazon QuickSight is a fast, cloud-powered business intelligence service that makes it easy to deliver insights to everyone in your organization. **Reference:** [Create a billing alarm to monitor your estimated AWS charges](https://docs.aws.amazon.com/AmazonCloudWatch/latest/monitoring/monitor_estimated_charges_with_cloudwatch.html) Save time with our [AWS cheat sheets](https://digitalcloud.training/certification-training/aws-certified-cloud-practitioner/monitoring-and-logging-services/).
26
How can consolidated billing within AWS Organizations help lower overall monthly expenses? 1. By providing a consolidated view of monthly billing across multiple accounts 2. By pooling usage across multiple accounts to achieve a pricing tier discount 3. By automating the creation of new accounts through APls 4. By leveraging service control policies (SCP) for centralized service management
**2.** By pooling usage across multiple accounts to achieve a pricing tier discount ## Footnote You can use the consolidated billing feature in AWS Organizations to consolidate billing and payment for multiple AWS accounts or multiple Amazon Internet Services Pvt. Ltd (AISPL) accounts. Every organization in AWS Organizations has a master (payer) account that pays the charges of all the member (linked) accounts. * Consolidated billing has the following benefits: * **One bill**: You get one bill for multiple accounts. * **Easy tracking**: You can track the charges across multiple accounts and download the combined cost and usage data. * **Combined usage**: You can combine the usage across all accounts in the organization to share the volume pricing discounts, Reserved Instance discounts, and Savings Plans. This can result in a lower charge for your project, department, or company than with individual standalone accounts. * **No extra fee**: Consolidated billing is offered at no additional cost. * By providing a consolidated view of monthly billing across multiple accounts is incorrect. This is useful, but doesn’t lower costs. * By automating the creation of new accounts through APls is incorrect as this does not lower costs. * By leveraging service control policies (SCP) for centralized service management is incorrect. SCPs are used for controlling the API actions you can use, not for lowering costs. **Reference:** [Consolidating billing for AWS Organizations](https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/consolidated-billing.html) Save time with our [AWS cheat sheets](https://digitalcloud.training/certification-training/aws-certified-cloud-practitioner/aws-billing-and-pricing/).
27
Which Amazon EC2 pricing model should be used to comply with per-core software license requirements? 1. Dedicated Hosts 2. On-Demand Instances 3. Spot Instances 4. Reserved Instances
**1.** Dedicated Hosts ## Footnote Amazon EC2 Dedicated Hosts allow you to use your eligible software licenses from vendors such as Microsoft and Oracle on Amazon EC2, so that you get the flexibility and cost effectiveness of using your own licenses, but with the resiliency, simplicity and elasticity of AWS. An Amazon EC2 Dedicated Host is a physical server fully dedicated for your use, so you can help address corporate compliance requirements. * On-Demand Instances is incorrect. This is a standard pricing model and does not offer the advantages requested. * Spot Instances is incorrect. This is used to obtain discounted pricing for short-term requirements that can be interrupted. * Reserved Instances is incorrect. This is used to lower cost by reserving usage of an instance for a term of 1 or 3 years. **Reference:** [Amazon EC2 Dedicated Hosts](https://aws.amazon.com/ec2/dedicated-hosts/) Save time with our [AWS cheat sheets](https://digitalcloud.training/certification-training/aws-certified-cloud-practitioner/aws-billing-and-pricing/).
28
When performing a total cost of ownership (TCO) analysis between on-premises and the AWS Cloud, which factors are only relevant to on-premises deployments? (Select TWO.) 1. Hardware procurement teams 2. Operating system licensing 3. Facility operations costs 4. Database administration 5. Application licensing
**1.** Hardware procurement teams **3.** Facility operations costs ## Footnote Facility operations and hardware procurement costs are something you no longer need to pay for in the AWS Cloud. These factors therefore must be included as an on-premise cost so you can understand the cost of staying in your own data centers. Database administration, operating system licensing and application licensing will still be required in the AWS Cloud. * Operating system licensing is incorrect as these are factors that are relevant to both on-premise and the cloud. * Database administration is incorrect as these are factors that are relevant to both on-premise and the cloud. * Application licensing is incorrect as these are factors that are relevant to both on-premise and the cloud. **Reference:** [The Total Cost of (Non) Ownership of Web Applications in the Cloud](https://media.amazonwebservices.com/AWS_TCO_Web_Applications.pdf) Save time with our [AWS cheat sheets](https://digitalcloud.training/certification-training/aws-certified-cloud-practitioner/aws-billing-and-pricing/).
29
Which of the following need to be included in a total cost of ownership (TCO) analysis? (Select TWO.) 1. IT Manager salary 2. Facility equipment installation 3. Application development 4. Company-wide marketing 5. Data center security costs
**2.** Facility equipment installation **5.** Data center security costs ## Footnote To perform a TCO you need to document all of the costs you’re incurring today to run your IT operations. That includes facilities equipment installation and data center security costs. That way you get to compare the full cost of running your IT on-premises today, to running it in the cloud. * IT Manager salary is incorrect. The IT manager’s salary should not be included, as it will still need to be paid when the organization moves to the cloud. * Application development is incorrect. Application development still needs to continue as you will still have applications running in the cloud. * Company-wide marketing is incorrect. Company-wide marketing campaigns are unaffected by moving to the cloud **Reference:** [AWS Pricing Calculator](https://aws.amazon.com/tco-calculator/) Save time with our [AWS cheat sheets](https://digitalcloud.training/certification-training/aws-certified-cloud-practitioner/aws-billing-and-pricing/).
30
A company needs significant cost savings for their non-interruptible workloads on AWS. **Which EC2 instance pricing model should the company select?** 1. Reserved Instances 2. On-Demand Instances 3. Spot Instances 4. Dedicated Hosts
**1.** Reserved Instances ## Footnote Reserved instances allow a customer to use on-demand EC2 instances at a discounted price based on a commitment of usage. If you require cost optimization of non-interruptible workloads, you can use Reserved instances to provide discounts on your EC2 spend. * On-Demand Instances is incorrect as On-demand instances are the most expensive, and the default billing option for EC2 instances. The customer requires significant cost savings, which cannot be provided by on-demand instances. * Spot Instances is incorrect. Spot Instances are not suitable as spot instances let you take advantage of unused EC2 capacity in the AWS cloud, which can be terminated at a 2-minute notice if AWS requires the capacity for on-demand customers. * Dedicated Hosts is incorrect, as this is a specific billing option if you require a dedicated server for server-bound-licenses. This is not required for this use case and is an expensive EC2 pricing option. **Reference:** [Amazon EC2 Reserved Instances](https://aws.amazon.com/ec2/pricing/reserved-instances/) Save time with our [AWS cheat sheets](https://digitalcloud.training/aws-compute-services/).
31
Which AWS service uses machine learning to analyze historical usage patterns and identify the optimal AWS resources for reducing costs and improving performance for your workloads? 1. AWS Budgets 2. AWS Cost Explorer 3. AWS Trusted Advisor 4. AWS Compute Optimizer
**4.** AWS Compute Optimizer ## Footnote AWS Compute Optimizer is the correct answer because this service leverages machine learning to analyze the historical usage patterns of your workloads, helping you to identify the most optimal AWS resources, reducing costs, and enhancing performance. * AWS Budgets is incorrect because it is primarily used to set custom cost and usage budgets that alert you when your budgets are breached, not for optimizing AWS resources based on historical usage patterns. * AWS Cost Explorer is incorrect because, while it allows you to visualize, understand, and manage your AWS spending and usage over time, it does not offer resource optimization recommendations based on machine learning analyses of historical usage data. * AWS Trusted Advisor is incorrect because, although it provides real-time guidance to help you provision your resources following AWS best practices, it doesn't specifically use machine learning to analyze historical usage patterns to recommend optimal AWS resources for your workloads. **Reference:** [AWS Compute Optimizer](https://aws.amazon.com/compute-optimizer/) Save time with our [AWS cheat sheets](https://digitalcloud.training/aws-billing-and-pricing/).
32
To reward customers for using their services, what are two ways AWS reduces prices? (Select TWO.) 1. Volume based discounts when you use more services 2. Reduction in inbound data transfer charges 3. Reduced cost for reserved capacity 4. Discounts for using a wider variety of services 5. Removal of termination fees for customers who spend more
**1.** Volume based discounts when you use more services **3.** Reduced cost for reserved capacity ## Footnote AWS provide volume based discount so that when you use more services you reduce the cost per service. You can also reserve capacity by locking in to fixed 1 or 3 year contracts to get significant discounts. You never pay for inbound data transfer. You don’t get discounts for using a variety of services, only when you use more services. There are never termination fees with AWS. **Reference:** [AWS Pricing](https://aws.amazon.com/pricing/) Save time with our [AWS cheat sheets](https://digitalcloud.training/certification-training/aws-certified-cloud-practitioner/aws-billing-and-pricing/).
33
Which of the below is an example of optimizing for cost? 1. Choosing the fastest EC2 instance to ensure performance 2. Provision extra capacity to allow for growth 3. Replace an EC2 compute instance with AWS Lambda 4. Deploy resources with AWS CloudFormation
**3.** Replace an EC2 compute instance with AWS Lambda ## Footnote Where possible, you should replace EC2 workloads with AWS managed services that don’t require you to take any capacity decisions. AWS Lambda is a serverless services and you only pay for actual processing time. Other examples of services that you don’t need to make capacity decisions with include: ELB, CloudFront, SQS, Kinesis Firehose, SES, and CloudSearch. * Choosing the fastest EC2 instance to ensure performance is incorrect. You should not choose the fastest EC2 instance if you’re trying to optimize for cost as this will be expensive, you should right-size your EC2 instances, so you use the cheapest EC2 instance to suit your workload’s requirements. * Provision extra capacity to allow for growth is incorrect. Provisioning extra capacity for growth is not an example of cost optimization. With cloud computing you no longer need to do this as you can configure applications, databases and storage systems to grow on demand. * Deploy resources with AWS CloudFormation is incorrect. Deploying resources with CloudFormation is great for consistently deploying application configurations from a template. However, this is not an example of cost optimization, it is more an example of operational optimization. **Reference:** [Cloud Financial Management with AWS](https://aws.amazon.com/aws-cost-management/) Save time with our [AWS cheat sheets](https://digitalcloud.training/certification-training/aws-certified-cloud-practitioner/architecting-for-the-cloud/).
AWS Cloud Practitioner
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