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Ayala Inc. has conducted the following analysis related to its product lines, using a traditional costing system (volume-based) and an activity-based costing system. Both the
Ayala Inc. has conducted the following analysis related to its product lines, using a traditional costing system (volume-based) and an activity-based costing system. Both the traditional and the activity-based costing systems include direct materials and direct labor costs. Total Costs Products Product 540X Sales Revenue Traditional ABC $180,000 $55,000 $50,000 Product 137Y Product 2495 160,000 50.000 35,000 70.000 15,000 35,000 (d) Provide a rationale as to why the costs for Product 540X are approximately the same using either the traditional or activity-based costing system. B/V I OWords)
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