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.
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
Required:
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. Compute the percentage difference in operating income for each of the product lines of Ayala.
Answers: 2
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Sunland Inc. has conducted the following analysis related to its product lines, using a traditional...
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