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P038 Atelier Bed 5

Revenue35,784
Direct margin12,690
Activity cost42,527
ABC profit-29,837 (-83.4%)
Traditional profit7,750

hidden loser Traditional costing assigns 4,940 of overhead from 177 labour hours; ABC assigns 42,527.

Profit waterfall

-40,000-20,000020,00040,000 Revenue: 35,784 35,784 RevenueDirect cost: -23,094 -23,094 Direct costDirect margin: 12,690 12,690 Direct marginEngineering changes: -19,143 -19,143 Engineering changesSetups: -10,725 -10,725 SetupsQuality inspection: -5,462 -5,462 Quality inspectionCustom finishing: -5,183 -5,183 Custom finishingMachine run: -1,475 -1,475 Machine runHand assembly: -540 -540 Hand assemblyProfit: -29,837 -29,837 Profit

Activity costs

ActivityCostShare
Engineering changes19,14345%
Setups10,72525%
Quality inspection5,46213%
Custom finishing5,18312%
Machine run1,4753%
Hand assembly5401%