*Exercise 16-2 (Part Level Submission)
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
Products
Revenue
Traditional
ABC
Product 540X
$211,000
$60,000 $48,200
Product 137Y
164,000
54,000 44,000
Product 2495
86,000
22,000 43,800
*(a)
Your answer is correct.
For each product line, compute operating income using the traditional costing system.
Product 540X $151000
Product 137Y $110000
Product 2495 $ 64000
Attempts: 1 of 2 used
*(b)
For each product line, compute operating income using the activity-based costing system.
Product 540X
Product 137Y
Product 249S
Attempts: 0 of 2 used
