Mini-project
Manufacturing, Robotics & Industry 4.0
Product profitability with activity-based costing
Find which products make money and which lose it once overheads are shared by activity, not by sales.
The brief
A factory shows a profit overall but does not know which products pay. Allocate overheads to products by the activities they use, compare the profit per product with the old method of sharing by sales or labour hours, and show where the old method hides losses. Good looks like: cost drivers justified, totals that reconcile with the books, and a recommendation on price or product mix.
What you will build
- Set up a small factory with 6 products and 5 overhead pools
- Choose a cost driver for each pool
- Allocate costs by activity and by the old method
- Compare profit per product
- Recommend price or mix changes
- Present to a finance manager
Free, open data to build it with
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