I can't seem to get the right number for this part, I thought it would be 175000*50% being 87500 or 87.5, but that seems to be wrong.

Flight Security Devices (FSD) has introduced a just-in-time production process and is considering the adoption of lean accounting principles to support its new production philosophy. The company has two product lines: Mechanical Devices and Electronic Devices. Two individual products are made in each line. Product-line manufacturing overhead costs are traced directly to product lines and then allocated to the two individual products in each line. The company's traditional cost accounting system allocates all plant-level facility costs and some corporate overhead costs to individual products. The latest accounting report using traditional cost accounting methods included the following information (in thousands of dollars). (Click the icon to view the accounting report.) (Click the icon to view further information.) Read the requirements. Requirement 1. What are the cost objects in FSD's lean accounting system? The cost object in lean accounting is the value stream FSD has identified the following area(s): Mechanical Devices and Electronic Devices Requirement 2. Compute operating income for the cost objects identified in requirement 1 using lean accounting principles. What would you compare this operating income against? Comment on your results. Use the table below to compute operating income for the cost objects identified in requirement 1 using lean accounting principles. (Enter all amounts in thousands.) Mechanical Electronic Devices Devices Sales $ 1,280 $ 1,380 Costs Direct material (purchases) 335 350 240 275 Direct manufacturing labor Manufacturing overhead Design and marketing costs 200 300 140 137 70 87.5 Plant facility costs 295 230.5 Value stream operating income Accounting report (in thousands of dollars) - X More Info Mechanical Devices Electronic Devices Product A Product B Product C Product D Sales $ 730 $ 550 $ 950 $ 430 FSD has determined that each of the two product lines represents a distinct value stream. It has also determined that out of the $175,000 ($55,000+$25,000+$65,000+$30,000) plant-level facility costs, product A occupies 25% of the plant's square footage, product B occupies 15%, product C occupies 30%, and product D occupies 20%. The remaining 10% of square footage is not being used. Finally, FSD has decided that in order to identify inefficiencies, direct material should be expensed in the period it is purchased, rather than when the material is used. According to purchasing records, direct material purchase costs during the period were as follows: Mechanical Devices Electronic Devices 180 120 250 60 160 80 220 55 Direct materials (based on quantity used) Direct manufacturing labor Manufacturing overhead (equipment lease, supervision, production control) Allocated plant-level facility costs Design and marketing costs Product A Product B Product C Product D 85 115 210 90 Direct material (purchases) $ 200 $ 135 $ 265 $ 85 55 25 65 30 92 48 99 38 8 2 56 2 Allocated corporate overhead costs $ 150 $ 160 $ 50 $ 155 Operating income Print Done Print Done