Time taken
2000
7500
500
Cost driver rate
25
6
40
80
Order entry exp apport.
Time taken Expenses
Manual cust order setup 2000 160000
Enter ind order lines 7500 600000
Validate an EDI order 500 40000
Cost driver Cost driver qty Cost driver rate
No. of manual orders 16000 10
No. of order lines 150000 4
No.of EDI orders 8000 5
Warehouse personnel
expenses app.
5000 48
75000 28.8
Customer A
Current
method
No. of cartons 200
Sales 103000
Cost of items 85000
Gross margin 18000
Warehousing
Personnel
Distribution Commercial freight
Order Entry
Total WH,Distr, Order costs 12750
Current
ABC Costing ABC Costing
method
200 200 200
103000 104000 104000
85000 85000 85000
18000 19000 19000
5000 5000
5760 6720
1200 2900
330 1720
12290 12750 16340
Total
Dif
19.2
34
53.2