costalloc

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P025 Studio Chair 4

Revenue151,441
Direct margin40,530
Activity cost31,038
ABC profit9,491 (6.3%)
Traditional profit23,958

subsidised Traditional costing assigns 16,572 of overhead from 593 labour hours; ABC assigns 31,038.

Profit waterfall

050,000100,000150,000200,000 Revenue: 151,441 151,441 RevenueDirect cost: -110,911 -110,911 Direct costDirect margin: 40,530 40,530 Direct marginSetups: -10,725 -10,725 SetupsQuality inspection: -5,462 -5,462 Quality inspectionCustom finishing: -5,183 -5,183 Custom finishingEngineering changes: -4,418 -4,418 Engineering changesMachine run: -3,440 -3,440 Machine runHand assembly: -1,812 -1,812 Hand assemblyProfit: 9,491 9,491 Profit

Activity costs

ActivityCostShare
Setups10,72535%
Quality inspection5,46218%
Custom finishing5,18317%
Engineering changes4,41814%
Machine run3,44011%
Hand assembly1,8126%