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P014 Classic Bed 2

Revenue1,252,267
Direct margin398,607
Activity cost136,656
ABC profit261,952 (20.9%)
Traditional profit143,333

over-charged Traditional costing assigns 255,274 of overhead from 9,127 labour hours; ABC assigns 136,656.

Profit waterfall

0500,0001,000,0001,500,000 Revenue: 1,252,267 1,252,267 RevenueDirect cost: -853,660 -853,660 Direct costDirect margin: 398,607 398,607 Direct marginMachine run: -51,681 -51,681 Machine runQuality inspection: -28,797 -28,797 Quality inspectionSetups: -28,274 -28,274 SetupsHand assembly: -27,903 -27,903 Hand assemblyProfit: 261,952 261,952 Profit

Activity costs

ActivityCostShare
Machine run51,68138%
Quality inspection28,79721%
Setups28,27421%
Hand assembly27,90320%