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C031 Dealer account 031 Dealer

Revenue584,319
Direct margin205,603
Activity cost105,244
ABC profit100,359 (17.2%)
Traditional profit49,133

over-charged Traditional costing assigns 156,471 of overhead from 5,595 labour hours; ABC assigns 105,244.

Profit waterfall

0200,000400,000600,000 Revenue: 584,319 584,319 RevenueDirect cost: -378,716 -378,716 Direct costDirect margin: 205,603 205,603 Direct marginMachine run: -27,997 -27,997 Machine runSetups: -17,225 -17,225 SetupsHand assembly: -17,104 -17,104 Hand assemblyQuality inspection: -15,076 -15,076 Quality inspectionPallet handling: -11,598 -11,598 Pallet handlingDelivery: -6,842 -6,842 DeliveryOther activities: -9,402 -9,402 Other activitiesProfit: 100,359 100,359 Profit

Activity costs

ActivityCostShare
Machine run27,99727%
Setups17,22516%
Hand assembly17,10416%
Quality inspection15,07614%
Pallet handling11,59811%
Delivery6,8427%
Order processing3,1713%
Customer support1,8732%
Custom finishing1,8532%
Engineering changes1,3901%
Credit and collections8131%
Returns handling3020%