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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 Sales Revenue Traditional ABC Product 540X $206,000 $57,000 $49,200 Product 137Y 156,000 49,000 27,000 Product 2495 93,000 18,000 47,800 (a) V Your answer is correct. For each product line, compute operating income using the traditional costing system. Product 540x $ 149,000 Product 137V $ 107,000 Product 2495 $ 75,000 (b) For each product line, compute operating income using the activity-based costing system. Product 540x $ Product 137Y $ Product 2495 $
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