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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

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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 traditional and the activity-based costing systems include direct materials and direct labor costs. Total Costs Products Product 540X Sales Revenue Traditional ABC Product 137Y $212,000 170,000 $58,000 $45,100 54,000 31,000 Product 2495 85,000 14,000 49,900 (a) Your answer is correct. For each product line, compute operating income using the traditional costing system. Product 540X $ 154000 Product 137Y $ 116000 Product 2495 $ 20000

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