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C023 Dealer account 023 Dealer

Revenue558,164
Direct margin197,479
Activity cost98,447
ABC profit99,031 (17.7%)
Traditional profit66,015

over-charged Traditional costing assigns 131,464 of overhead from 4,700 labour hours; ABC assigns 98,447.

Profit waterfall

0200,000400,000600,000 Revenue: 558,164 558,164 RevenueDirect cost: -360,686 -360,686 Direct costDirect margin: 197,479 197,479 Direct marginMachine run: -23,461 -23,461 Machine runSetups: -16,580 -16,580 SetupsHand assembly: -14,370 -14,370 Hand assemblyQuality inspection: -12,860 -12,860 Quality inspectionPallet handling: -8,938 -8,938 Pallet handlingDelivery: -7,755 -7,755 DeliveryOther activities: -14,483 -14,483 Other activitiesProfit: 99,031 99,031 Profit

Activity costs

ActivityCostShare
Machine run23,46124%
Setups16,58017%
Hand assembly14,37015%
Quality inspection12,86013%
Pallet handling8,9389%
Delivery7,7558%
Custom finishing4,6685%
Order processing3,5944%
Engineering changes2,8233%
Customer support1,8732%
Credit and collections9221%
Returns handling6031%