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P031 Atelier Cabinet 4

Revenue74,031
Direct margin32,460
Activity cost48,600
ABC profit-16,140 (-21.8%)
Traditional profit26,989

hidden loser Traditional costing assigns 5,471 of overhead from 196 labour hours; ABC assigns 48,600.

Profit waterfall

-20,000020,00040,00060,00080,000 Revenue: 74,031 74,031 RevenueDirect cost: -41,571 -41,571 Direct costDirect margin: 32,460 32,460 Direct marginEngineering changes: -23,561 -23,561 Engineering changesSetups: -11,700 -11,700 SetupsQuality inspection: -5,958 -5,958 Quality inspectionCustom finishing: -5,615 -5,615 Custom finishingMachine run: -1,170 -1,170 Machine runHand assembly: -597 -597 Hand assemblyProfit: -16,140 -16,140 Profit

Activity costs

ActivityCostShare
Engineering changes23,56148%
Setups11,70024%
Quality inspection5,95812%
Custom finishing5,61512%
Machine run1,1702%
Hand assembly5971%