Question
Sunland 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
Sunland 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 | $200,000 | $53,000 | $47,100 | |||
Product 137Y | 162,000 | 48,000 | 29,000 | |||
Product 249S | 92,000 | 25,000 | 49,900 |
For each product line, compute operating income using the traditional costing system.
Product 540X | $enter a dollar amount | |
---|---|---|
Product 137Y | $enter a dollar amount | |
Product 249S |
b) For each product line, compute operating income using the activity-based costing system c) 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)]divided operating Income (traditional cost)(round the percentage to two decimals).
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