costalloc

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C072 Contract account 072 Contract

Revenue155,374
Direct margin45,822
Activity cost43,945
ABC profit1,877 (1.2%)
Traditional profit-99

hidden winner Traditional costing assigns 45,921 of overhead from 1,642 labour hours; ABC assigns 43,945.

Profit waterfall

050,000100,000150,000200,000 Revenue: 155,374 155,374 RevenueDirect cost: -109,552 -109,552 Direct costDirect margin: 45,822 45,822 Direct marginSetups: -10,113 -10,113 SetupsMachine run: -8,722 -8,722 Machine runQuality inspection: -6,686 -6,686 Quality inspectionHand assembly: -5,020 -5,020 Hand assemblyPallet handling: -3,355 -3,355 Pallet handlingEngineering changes: -2,654 -2,654 Engineering changesOther activities: -7,397 -7,397 Other activitiesProfit: 1,877 1,877 Profit

Activity costs

ActivityCostShare
Setups10,11323%
Machine run8,72220%
Quality inspection6,68615%
Hand assembly5,02011%
Pallet handling3,3558%
Engineering changes2,6546%
Custom finishing2,5376%
Customer support1,9484%
Delivery1,8254%
Order processing9512%
Credit and collections1360%
Returns handling00%