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C044 Dealer account 044 Dealer

Revenue376,727
Direct margin137,097
Activity cost76,401
ABC profit60,696 (16.1%)
Traditional profit35,844

over-charged Traditional costing assigns 101,253 of overhead from 3,620 labour hours; ABC assigns 76,401.

Profit waterfall

0100,000200,000300,000400,000 Revenue: 376,727 376,727 RevenueDirect cost: -239,630 -239,630 Direct costDirect margin: 137,097 137,097 Direct marginMachine run: -20,403 -20,403 Machine runSetups: -11,836 -11,836 SetupsHand assembly: -11,068 -11,068 Hand assemblyQuality inspection: -9,329 -9,329 Quality inspectionPallet handling: -6,685 -6,685 Pallet handlingDelivery: -5,930 -5,930 DeliveryOther activities: -11,150 -11,150 Other activitiesProfit: 60,696 60,696 Profit

Activity costs

ActivityCostShare
Machine run20,40327%
Setups11,83615%
Hand assembly11,06814%
Quality inspection9,32912%
Pallet handling6,6859%
Delivery5,9308%
Custom finishing3,8055%
Order processing2,7494%
Customer support2,0983%
Engineering changes1,1912%
Credit and collections7051%
Returns handling6031%