Question
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
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 Product 137Y Sales Revenue Traditional ABC Product 2495 $200,000 163,000 92,000 $56,000 $49,100 55,000 38,000 18,000 41,900 (a) For each product line, compute operating income using the traditional costing system. Product 540X $ Product 137Y $ Product 2495 $ Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller. Robert Hermann, has developed the following information. Car Truck Estimated wheels produced 42,000 15.000 Direct labor hours per wheel 1 3 Total estimated overhead costs for the two product lines are $835,200. (a1) Calculate overhead rate. (Round answer to 2 decimal places, eg. 12.25) Overhead rate : $ per direct labor hour
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