Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 Sales Revenue Traditional ABC $212,000 $58,000 $45.900 Products Product 540x Product 137Y Product 2495 165,000 50.000 39,000 82.000 20,000 43,100 (a) For each product line.compute operating income using the traditional costing system. Product 540X $ Product 1377 $ Product 2495 $ Instructions a) For each product line, compute operating income using the traditional costing system. 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)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started