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P033 Atelier Chair 5

Revenue63,548
Direct margin19,648
Activity cost60,040
ABC profit-40,392 (-63.6%)
Traditional profit12,116

hidden loser Traditional costing assigns 7,532 of overhead from 269 labour hours; ABC assigns 60,040.

Profit waterfall

-50,000-25,000025,00050,00075,000 Revenue: 63,548 63,548 RevenueDirect cost: -43,901 -43,901 Direct costDirect margin: 19,648 19,648 Direct marginEngineering changes: -23,561 -23,561 Engineering changesSetups: -19,499 -19,499 SetupsQuality inspection: -7,448 -7,448 Quality inspectionCustom finishing: -7,342 -7,342 Custom finishingMachine run: -1,367 -1,367 Machine runHand assembly: -823 -823 Hand assemblyProfit: -40,392 -40,392 Profit

Activity costs

ActivityCostShare
Engineering changes23,56139%
Setups19,49932%
Quality inspection7,44812%
Custom finishing7,34212%
Machine run1,3672%
Hand assembly8231%