Standard Cost ($/lb)

Alloy: Condition
Round

Conversion:
Roller Wire

Die Steel:
Chipper Knife

Production (lbs)
Price

478,679
2.31 $

2,081,543
0.77 $

2,413,299
1.02

Materials
Direct labor
Direct manufacturing expense

$
$
$

0.54 $
0.29 $
0.24 $

$
0.07 $
0.06 $

0.12
0.28
0.23

Contribution margin
Contribution margin (%)
Total contribution

$
$

1.24 $
53.7%
593,562 $

0.64 $
83.1%
1,332,188 $

Manufacturing & administrative

overhead

0.64 $

0.64 $

Operating profit
Operating profit (%)
Total operating profit

0.60 $
26.0%
287,207 $

$
0.0%
$

Total Profit under Standard Costing

(2,437,175)

0.39
38.2%
941,187
0.64

(0.25)
-24.5%
(603,325)

Die Steel :
Round Bar

High Speed:
Machine Coil

6,697,982
0.93 $

2,530,552
2.33

$
$
$

0.21 $
0.18 $
0.16 $

1.58
0.14
0.12

$
$

0.38 $
40.9%
2,545,233 $

0.64 $

(0.26) $
-28.0%
(1,741,475) $

0.49
21.0%
1,239,970
0.64

(0.15)
-6.4%
(379,583)

Activity Cost ($/lb)

Alloy: Condition
Round

Conversion:
Roller Wire

Die Steel:
Chipper Knife

Production (lbs)
Price

478,679
2.31 $

2,081,543
0.77 $

2,413,299
1.02

Materials
Direct labor

$
$

0.54 $
0.29 $

$
0.07 $

0.12
0.28

Contribution margin
Contribution margin (%)
Total contribution

$
$

1.48 $
64.1%
708,445 $

0.70 $
90.9%
1,457,080 $

Manufacturing expense:
Melting
Refining
Molding
Rolling
Finishing
G&A
Material handling & setup
Order Processing
Production planning
Technical support

$
$
$
$
$
$
$
$
$
$

0.200
0.156
0.031
0.059
0.043
0.107
0.173
0.138
0.117
0.564

Total Expenses

Operating profit
Operating profit (%)
Total operating profit

Total profit under ABC

Melting
Melting
Melting
Refining
Refining
Refining
Molding
Molding
Molding

$
$
$
$
$
$
$
$
$
$

0.088
0.014
0.107
0.173
0.138
0.117
0.197

0.62
60.8%
1,496,245

$
$
$
$
$
$
$
$
$
$

0.090
0.074
0.018
0.194
0.051
0.107
0.115
0.092
0.078
0.150

1.59 $

0.84 $

0.97

(0.109) $
-4.7%
(52,386) $

(0.135) $
-17.5%
(281,219) $

(0.350)
-34.3%
(845,267)

(763,665)
Volume
5,145,632
5,145,632
5,145,632
5,691,042
5,691,042
5,691,042
4,226,965
4,226,965
4,226,965

$
$
$
$
$
$
$
$
$

Amount
2,139,865
975,130
2,036,477
1,711,892
780,104
1,745,551
427,973
390,052
290,925

Driver Rate
0.42
0.19
0.40
0.30
0.14
0.31
0.10
0.09
0.07

Rolling
Rolling
Rolling
Finishing
Finishing
Finishing
General & administrative
Material handling & setup
Order processing
Production planning
Technical support

8,258,382
8,258,382
8,258,382
4,057,311
4,057,311
4,057,311
50,299,420
57,147
57,147
57,147
6,642

Total

AB Costing ($/lb)
Production (lbs)
Number of SKUs
Number of Orders
Bill of Materials (lbs of output)
Steel scrap
Alloys

Machine Time
Melting
Refining
Molding
Rolling
Finishing
Total Time
Material handling & setup
Order processing
Production planning
Technical support

$
$
$
$
$
$
$
$
$
$
$

2,995,811
975,130
872,776
1,283,919
780,104
872,776
5,400,955
4,936,068
3,953,709
3,339,500
5,766,579

41,675,296

0.36
0.12
0.11
0.32
0.19
0.22
0.11
86.37
69.18
58.44
868.20

Alloy:

Conversion:

Die Steel:

Condition
Round

Roller Wire

Chipper Knife

478,679
311
957

2,081,543
473
4,163

2,413,299
418
3,218

1.00
0.01
(@ $48.29/lb)

1.00
0.01
(@ $6.29/lb)

0.20
0.21
0.12
0.10
0.06
0.69
0.0019992521
0.0019992521
0.0019992521
0.0006497047

0.15
0.02
0.17
0.0019999587
0.0019999587
0.0019999587
0.0002272353

0.09
0.10
0.07
0.33
0.07
0.66
0.0013334444
0.0013334444
0.0013334444
0.0001732069

Die Steel :
Round Bar

High Speed:
Machine Coil

6,697,982
0.93 $

2,530,552
2.33

$
$

0.21 $
0.18 $

1.58
0.14

0.54 $
58.1%
3,616,910 $

$
$
$
$
$
$
$
$
$
$

$
$
$
$
$
$
$
$
$
$

0.090
0.074
0.018
0.018
0.036
0.107
0.035
0.028
0.023
0.035

0.53 $

0.46

0.007 $
0.8%
47,430 $

0.090
0.074
0.021
0.053
0.058
0.107
0.043
0.035
0.029
0.022

0.61
26.2%
1,543,637

Culmulative
1.00

0.74

0.26

0.145
6.2%
367,778

Driver
melt machine minutes
melt machine minutes
melt machine minutes
refine machine minutes
refine machine minutes
refine machine minutes
mold machine minutes
mold machine minutes
mold machine minutes

0.59

0.72
0.11
86.37
69.18
58.44
868.20

roll machine minutes

roll machine minutes
roll machine minutes
finish machine minutes
finish machine minutes
finish machine minutes
pounds
orders
orders
orders
SKUs

Die Steel:

High Speed:

Round Bar

Machine Coil

6,697,682
172
3,349

2,530,552
102
1,012

1.00
1.00
0.01
0.01
(@ $15.29/lb)
(@ $152.29/lb)
Cost pool rate
0.09
0.10
0.08
0.09
0.08
0.44
0.0005000237
0.0005000237
0.0005000237
0.0000256805

0.09
0.10
0.07
0.03
0.05
0.34
0.0003999127
0.0003999127
0.0003999127
0.0000403074

1.00
0.74
0.26
0.59
0.72
0.11
86.37
69.18
58.44
868.20