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C014 Retail chain account 014 Retail chain

Revenue213,267
Direct margin62,240
Activity cost43,922
ABC profit18,317 (8.6%)
Traditional profit3,388

over-charged Traditional costing assigns 58,851 of overhead from 2,104 labour hours; ABC assigns 43,922.

Profit waterfall

050,000100,000150,000200,000250,000 Revenue: 213,267 213,267 RevenueDirect cost: -151,027 -151,027 Direct costDirect margin: 62,240 62,240 Direct marginMachine run: -9,209 -9,209 Machine runSetups: -8,142 -8,142 SetupsHand assembly: -6,433 -6,433 Hand assemblyQuality inspection: -6,400 -6,400 Quality inspectionPallet handling: -4,481 -4,481 Pallet handlingDelivery: -2,623 -2,623 DeliveryOther activities: -6,635 -6,635 Other activitiesProfit: 18,317 18,317 Profit

Activity costs

ActivityCostShare
Machine run9,20921%
Setups8,14219%
Hand assembly6,43315%
Quality inspection6,40015%
Pallet handling4,48110%
Delivery2,6236%
Customer support2,2475%
Order processing1,5333%
Custom finishing1,2993%
Engineering changes1,1623%
Credit and collections3931%
Returns handling00%