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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
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 Sales Revenue Traditional ABC Product 540X $202,000 $59,000 $45,900 Product 137Y 172,000 52,000 41,000 Product 2495 84,000 17,000 41,100 (a) For each product line, compute operating income using the traditional costing system. Product 540x $ Product 137Y $ Product 2495 $
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