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C041 Dealer account 041 Dealer

Revenue820,134
Direct margin289,745
Activity cost144,702
ABC profit145,043 (17.7%)
Traditional profit58,919

over-charged Traditional costing assigns 230,826 of overhead from 8,253 labour hours; ABC assigns 144,702.

Profit waterfall

0200,000400,000600,000800,0001,000,000 Revenue: 820,134 820,134 RevenueDirect cost: -530,389 -530,389 Direct costDirect margin: 289,745 289,745 Direct marginMachine run: -38,714 -38,714 Machine runHand assembly: -25,231 -25,231 Hand assemblySetups: -23,020 -23,020 SetupsQuality inspection: -21,201 -21,201 Quality inspectionPallet handling: -17,109 -17,109 Pallet handlingDelivery: -8,781 -8,781 DeliveryOther activities: -10,645 -10,645 Other activitiesProfit: 145,043 145,043 Profit

Activity costs

ActivityCostShare
Machine run38,71427%
Hand assembly25,23117%
Setups23,02016%
Quality inspection21,20115%
Pallet handling17,10912%
Delivery8,7816%
Order processing4,0703%
Customer support2,2472%
Custom finishing1,5831%
Engineering changes1,0971%
Credit and collections1,0441%
Returns handling6030%