costalloc

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C074 Contract account 074 Contract

Revenue41,127
Direct margin11,035
Activity cost11,789
ABC profit-754 (-1.8%)
Traditional profit-3,526

over-charged Traditional costing assigns 14,561 of overhead from 521 labour hours; ABC assigns 11,789.

Profit waterfall

-10,000010,00020,00030,00040,00050,000 Revenue: 41,127 41,127 RevenueDirect cost: -30,092 -30,092 Direct costDirect margin: 11,035 11,035 Direct marginMachine run: -2,445 -2,445 Machine runHand assembly: -1,592 -1,592 Hand assemblyDelivery: -1,483 -1,483 DeliverySetups: -1,415 -1,415 SetupsQuality inspection: -1,319 -1,319 Quality inspectionPallet handling: -1,198 -1,198 Pallet handlingOther activities: -2,338 -2,338 Other activitiesProfit: -754 -754 Profit

Activity costs

ActivityCostShare
Machine run2,44521%
Hand assembly1,59214%
Delivery1,48313%
Setups1,41512%
Quality inspection1,31911%
Pallet handling1,19810%
Customer support1,12410%
Order processing7406%
Returns handling3023%
Credit and collections1221%
Engineering changes500%