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P008 Classic Stool 1

Revenue1,410,317
Direct margin500,478
Activity cost154,955
ABC profit345,522 (24.5%)
Traditional profit145,556

over-charged Traditional costing assigns 354,922 of overhead from 12,690 labour hours; ABC assigns 154,955.

Profit waterfall

0500,0001,000,0001,500,000 Revenue: 1,410,317 1,410,317 RevenueDirect cost: -909,839 -909,839 Direct costDirect margin: 500,478 500,478 Direct marginMachine run: -63,752 -63,752 Machine runHand assembly: -38,795 -38,795 Hand assemblyQuality inspection: -27,059 -27,059 Quality inspectionSetups: -25,349 -25,349 SetupsProfit: 345,522 345,522 Profit

Activity costs

ActivityCostShare
Machine run63,75241%
Hand assembly38,79525%
Quality inspection27,05917%
Setups25,34916%