Need help computing part C. Part A and B are correct Ayala Inc. has conducted th
ID: 2390501 • Letter: N
Question
Need help computing part C. Part A and B are correct
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
Products
Sales Revenue
Traditional
ABC
(a)
Open Show Work
SHOW SOLUTION
SHOW ANSWER
LINK TO TEXT
(b)
Open Show Work
SHOW SOLUTION
SHOW ANSWER
LINK TO TEXT
(c)
Open Show Work
LINK TO TEXT
Need help computing part C. Part A and B are correct
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
Products
Sales Revenue
Traditional
ABC
Product 540X $206,600 $53,830 $48,850 Product 137Y 174,300 50,870 29,270 Product 249S 91,130 18,030 44,610Explanation / Answer
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)] ÷ Operating Income (traditional cost)
The calculations are done as per the given formula and operating income calculated in part a and part b in the question
1. Product 540X = (157750 - 152770) / 152770 = 0.03 %
2. Product 137Y = (145030 - 123430) / 123430 = 0.17%
3. Product 249S = (46520 - 73100) 73100 = ( 0.36%)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.