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C012 Retail chain account 012 Retail chain

Revenue92,557
Direct margin29,308
Activity cost33,253
ABC profit-3,945 (-4.3%)
Traditional profit5,254

hidden loser Traditional costing assigns 24,054 of overhead from 860 labour hours; ABC assigns 33,253.

Profit waterfall

-20,000020,00040,00060,00080,000100,000 Revenue: 92,557 92,557 RevenueDirect cost: -63,249 -63,249 Direct costDirect margin: 29,308 29,308 Direct marginSetups: -6,207 -6,207 SetupsEngineering changes: -5,197 -5,197 Engineering changesMachine run: -4,598 -4,598 Machine runQuality inspection: -3,844 -3,844 Quality inspectionDelivery: -2,851 -2,851 DeliveryHand assembly: -2,629 -2,629 Hand assemblyOther activities: -7,927 -7,927 Other activitiesProfit: -3,945 -3,945 Profit

Activity costs

ActivityCostShare
Setups6,20719%
Engineering changes5,19716%
Machine run4,59814%
Quality inspection3,84412%
Delivery2,8519%
Hand assembly2,6298%
Custom finishing2,4607%
Order processing1,7445%
Pallet handling1,7015%
Customer support1,5735%
Credit and collections4471%
Returns handling00%