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P036 Atelier Sofa 5

Revenue26,587
Direct margin9,288
Activity cost48,647
ABC profit-39,359 (-148.0%)
Traditional profit7,305

hidden loser Traditional costing assigns 1,984 of overhead from 71 labour hours; ABC assigns 48,647.

Profit waterfall

-40,000-20,000020,00040,000 Revenue: 26,587 26,587 RevenueDirect cost: -17,299 -17,299 Direct costDirect margin: 9,288 9,288 Direct marginEngineering changes: -27,978 -27,978 Engineering changesSetups: -10,725 -10,725 SetupsQuality inspection: -5,462 -5,462 Quality inspectionCustom finishing: -3,671 -3,671 Custom finishingMachine run: -596 -596 Machine runHand assembly: -216 -216 Hand assemblyProfit: -39,359 -39,359 Profit

Activity costs

ActivityCostShare
Engineering changes27,97858%
Setups10,72522%
Quality inspection5,46211%
Custom finishing3,6718%
Machine run5961%
Hand assembly2160%