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Exercise 18-2 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.
Exercise 18-2
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. For each product line, compute operating income using the traditional costing system. Product 540x $ __________ Product 137Y $ __________ Product 249S $ __________ For each product line, compute operating income using the activity-based costing system. Product 540x $ __________ Product 137Y $ __________ Product 249S $ __________ Using the following formula, compute the percentage difference in operating income for each of the product lines of Ayala: [Operating Income (ABC) - Operating Income (traditional cost)] divide Operating Income (traditional cost). (Round answers to 2 decimal places, e.g. 12.25. Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Product 540X __________ % Product 137Y __________ % Product 249S __________ % Step by Step Solution
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