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C042 Dealer account 042 Dealer

Revenue182,232
Direct margin63,631
Activity cost36,843
ABC profit26,788 (14.7%)
Traditional profit16,251

over-charged Traditional costing assigns 47,380 of overhead from 1,694 labour hours; ABC assigns 36,843.

Profit waterfall

050,000100,000150,000200,000 Revenue: 182,232 182,232 RevenueDirect cost: -118,601 -118,601 Direct costDirect margin: 63,631 63,631 Direct marginMachine run: -9,094 -9,094 Machine runDelivery: -6,044 -6,044 DeliveryHand assembly: -5,179 -5,179 Hand assemblyQuality inspection: -4,126 -4,126 Quality inspectionSetups: -4,063 -4,063 SetupsPallet handling: -3,498 -3,498 Pallet handlingOther activities: -4,840 -4,840 Other activitiesProfit: 26,788 26,788 Profit

Activity costs

ActivityCostShare
Machine run9,09425%
Delivery6,04416%
Hand assembly5,17914%
Quality inspection4,12611%
Setups4,06311%
Pallet handling3,4989%
Order processing2,8018%
Customer support1,1243%
Credit and collections7192%
Engineering changes1961%
Returns handling00%