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C068 Contract account 068 Contract

Revenue60,449
Direct margin16,718
Activity cost21,393
ABC profit-4,675 (-7.7%)
Traditional profit-1,052

subsidised Traditional costing assigns 17,770 of overhead from 635 labour hours; ABC assigns 21,393.

Profit waterfall

-20,000020,00040,00060,00080,000 Revenue: 60,449 60,449 RevenueDirect cost: -43,732 -43,732 Direct costDirect margin: 16,718 16,718 Direct marginEngineering changes: -4,889 -4,889 Engineering changesSetups: -4,286 -4,286 SetupsMachine run: -2,603 -2,603 Machine runQuality inspection: -2,548 -2,548 Quality inspectionHand assembly: -1,942 -1,942 Hand assemblyCustom finishing: -1,647 -1,647 Custom finishingOther activities: -3,477 -3,477 Other activitiesProfit: -4,675 -4,675 Profit

Activity costs

ActivityCostShare
Engineering changes4,88923%
Setups4,28620%
Machine run2,60312%
Quality inspection2,54812%
Hand assembly1,9429%
Custom finishing1,6478%
Pallet handling1,0305%
Delivery1,0265%
Customer support8244%
Order processing5292%
Credit and collections680%
Returns handling00%