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P032 Atelier Stool 4

Revenue30,027
Direct margin13,358
Activity cost42,907
ABC profit-29,549 (-98.4%)
Traditional profit10,438

hidden loser Traditional costing assigns 2,920 of overhead from 104 labour hours; ABC assigns 42,907.

Profit waterfall

-40,000-20,000020,00040,000 Revenue: 30,027 30,027 RevenueDirect cost: -16,669 -16,669 Direct costDirect margin: 13,358 13,358 Direct marginEngineering changes: -22,088 -22,088 Engineering changesSetups: -10,725 -10,725 SetupsQuality inspection: -5,462 -5,462 Quality inspectionCustom finishing: -3,671 -3,671 Custom finishingMachine run: -643 -643 Machine runHand assembly: -319 -319 Hand assemblyProfit: -29,549 -29,549 Profit

Activity costs

ActivityCostShare
Engineering changes22,08851%
Setups10,72525%
Quality inspection5,46213%
Custom finishing3,6719%
Machine run6431%
Hand assembly3191%