costalloc

← Products

P012 Classic Sofa 2

Revenue1,676,954
Direct margin533,702
Activity cost203,455
ABC profit330,247 (19.7%)
Traditional profit-21,596

hidden winner Traditional costing assigns 555,298 of overhead from 19,854 labour hours; ABC assigns 203,455.

Profit waterfall

0500,0001,000,0001,500,0002,000,000 Revenue: 1,676,954 1,676,954 RevenueDirect cost: -1,143,252 -1,143,252 Direct costDirect margin: 533,702 533,702 Direct marginMachine run: -83,204 -83,204 Machine runHand assembly: -60,697 -60,697 Hand assemblyQuality inspection: -31,280 -31,280 Quality inspectionSetups: -28,274 -28,274 SetupsProfit: 330,247 330,247 Profit

Activity costs

ActivityCostShare
Machine run83,20441%
Hand assembly60,69730%
Quality inspection31,28015%
Setups28,27414%