Product Capacity:

Overhead expenses Total Capacity (hours)

DL $ 351,000 10800 *45x2x6x20
Machine $ 334,800 14880 *62x2x6x20
Receiving and production control $ 15,600 520 *2x2x6.5x20
Setup $ 117,000 3600 *15x2x6x20
Engineers $ 78,000 960 *8x1x6x20
Packaging and shipment $ 109,200 3640 *14x2x6.5x20

Values Pumps Flow controllers

Production units 7500 12500 4000
Actual Selling price $79.00 $70.00 $95.00

Sales $ $592,500 $875,000 $380,000

DL Expense $92,625 $203,125 $52,000
DM Expense $120,000 $250,000 $88,000
Contribution Margin $379,875 $421,875 $240,000

MOH
Machine $84,375 $140,625 $27,000
Receiving and production control $600 $3,000 $8,438
Setup $3,250 $19,500 $87,750
Engineers $4,875 $19,500 $48,750
Packaging and shipment $1,200 $3,000 $21,000
Total MOH $94,300 $185,625 $192,938

Gross Margin $285,575 $236,250 $47,062

GM% 48% 27% 12%
 Cost/unit
$32.50
$22.50 Difference in Gross Margins
$30.00
$32.50 Values Pumps
$81.25 Traditional 35% 5%
$30.00 TDABC 48% 27%

Total Diff erence in Gr os s Mar gins

Traditional TDABC
60%

$1,847,500 50%
$347,750
$458,000 40%

$1,041,750 30%

20%
$252,000
10%
$12,038
$110,500 0%
Values Pumps Flow Controle
$73,125
$25,200
$472,863

$568,887
 Flow Controler
38%
12%

oss Mar gins

TDABC

s Flow Controler