Johnson Case Study

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |Totals | make up/activity | |Saver |Oscars |Midwellen |Downtown |Total | | proceeds handling |67 two hundred0 |800000 |0.84 | |# cases |80,000 |80,000 |8,000 |30,000 |800,000 | | | | | | | speak to |67,200 |67,200 |6,720 |25,200 |672,000 | |taking parliamentary procedures from clients |100000 |500 |200 | |#orders |16 |40 |20 |30 |500 | | | | | | |cost |3,200 |8,000 |4,000 |6,000 |100,000 | |delivering the product |140000 |44800 |3.125 | |Miles |550 |7,600 |2,200 |920 |44,800 | | | | | | |cost |1,719 |23,750 |6,875 |2,875 |140,000 | |expditing deliveries |198000 |2500 |79.2 | |expedited |10 |250 |130 |90 |2,500 | | | | | | |cost |792 |19,800 |10,296 |7,128 |198,000 | |sales visits |90000 |360 |250 | |#visits |12 |25 |18 |9 |360 | | summation |1200000 | | | |cost |3,000 |6,250 |4,500 |2,250 |90,000 | | | | | | |Total Activity cost |75,911 |125,000 |32,391 |43,453 |1,200,000 | | | | | | | | | | | | | | | | | | |Customer sales |1,168,000 |1,192,000 |121,520 |454,500 |12,000,000 | | | | | | |Less COGS |104,800 |104,800 |104,800 |393,000 |10,480,000 | | | | | | |Gross profit |1,063,200 |1,087,200 |16,720 |61,500 |1,520,000 | | | | | | |less acitivty costs |75,911 |125,000 |32,391 |43,453 |1,200,000 | | | | | | |customer Profitablility |987,289 |962,200 |-15,671 |18,047 |320,000 | | | | | | |Ratio |84.53% |80.72% |-12.90% |3.97% |2.67% | | | | | | | | | | | | | | | | | | | | | | | | | |The ABC method is clearly superior as it allocates the costs to the accounts that incur the costs. By placing costs purely by total sales, you miss many of the variables that could be present in the overall process.



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