costalloc

← Products

P011 Classic Desk 2

Revenue963,833
Direct margin304,923
Activity cost173,402
ABC profit131,521 (13.6%)
Traditional profit-212,770

hidden winner Traditional costing assigns 517,693 of overhead from 18,510 labour hours; ABC assigns 173,402.

Profit waterfall

0200,000400,000600,000800,0001,000,000 Revenue: 963,833 963,833 RevenueDirect cost: -658,909 -658,909 Direct costDirect margin: 304,923 304,923 Direct marginHand assembly: -56,588 -56,588 Hand assemblyMachine run: -49,193 -49,193 Machine runSetups: -34,124 -34,124 SetupsQuality inspection: -32,024 -32,024 Quality inspectionEngineering changes: -1,473 -1,473 Engineering changesProfit: 131,521 131,521 Profit

Activity costs

ActivityCostShare
Hand assembly56,58833%
Machine run49,19328%
Setups34,12420%
Quality inspection32,02418%
Engineering changes1,4731%