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C038 Dealer account 038 Dealer

Revenue141,977
Direct margin52,814
Activity cost31,298
ABC profit21,516 (15.2%)
Traditional profit14,094

over-charged Traditional costing assigns 38,720 of overhead from 1,384 labour hours; ABC assigns 31,298.

Profit waterfall

050,000100,000150,000 Revenue: 141,977 141,977 RevenueDirect cost: -89,163 -89,163 Direct costDirect margin: 52,814 52,814 Direct marginMachine run: -6,564 -6,564 Machine runDelivery: -4,676 -4,676 DeliveryHand assembly: -4,232 -4,232 Hand assemblySetups: -4,187 -4,187 SetupsQuality inspection: -3,494 -3,494 Quality inspectionPallet handling: -2,684 -2,684 Pallet handlingOther activities: -5,462 -5,462 Other activitiesProfit: 21,516 21,516 Profit

Activity costs

ActivityCostShare
Machine run6,56421%
Delivery4,67615%
Hand assembly4,23214%
Setups4,18713%
Quality inspection3,49411%
Pallet handling2,6849%
Order processing2,1677%
Customer support1,3484%
Custom finishing1,0363%
Credit and collections5562%
Returns handling3021%
Engineering changes520%