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C010 Retail chain account 010 Retail chain

Revenue310,069
Direct margin98,827
Activity cost102,823
ABC profit-3,996 (-1.3%)
Traditional profit18,852

hidden loser Traditional costing assigns 79,975 of overhead from 2,859 labour hours; ABC assigns 102,823.

Profit waterfall

-100,0000100,000200,000300,000400,000 Revenue: 310,069 310,069 RevenueDirect cost: -211,242 -211,242 Direct costDirect margin: 98,827 98,827 Direct marginEngineering changes: -26,396 -26,396 Engineering changesSetups: -20,207 -20,207 SetupsMachine run: -15,173 -15,173 Machine runQuality inspection: -13,078 -13,078 Quality inspectionHand assembly: -8,742 -8,742 Hand assemblyPallet handling: -6,326 -6,326 Pallet handlingOther activities: -12,901 -12,901 Other activitiesProfit: -3,996 -3,996 Profit

Activity costs

ActivityCostShare
Engineering changes26,39626%
Setups20,20720%
Machine run15,17315%
Quality inspection13,07813%
Hand assembly8,7429%
Pallet handling6,3266%
Custom finishing4,8945%
Delivery3,3073%
Order processing2,0092%
Customer support1,5732%
Returns handling6031%
Credit and collections5151%