Using the following formula, compute the percentage dflerence in operating ince

Question

Using the following formula, compute the percentage dflerence in operating ince imal laces9. 12.25. Enter negative amounts using either a negative sign for each of the product lines of Ayala: [Operating Income (ABC)-Operating Income (Round answers to 2 decimal places, e.g. 12.25. Enter negative amounts using either a negative sign Using the following formula, compute the percentage difference in operating income (traditional cost))+Operating Income (traditional cost). preceding the number e.g. 45 or parentheses e.g. (45).) Product 540X Product 137Y Product 2495

Explanation / Answer

SOLUTION

Operating income under Traditional -

Operating income under ABC -

Percentage Difference in operating income-

Product 540 X = ($158,300 - $153,000) / $153,000 = 3.46%

Product 137 Y = ($122,000 - $105,000) / $105,000 = 16.19%

Product 249 S = ($51,700 - $74,000) / $74,000 = (30.16%)

Product 540 X ($) Product 137 Y ($) Product 249 S ($) Sales Revenue (A) 207,000 155,000 85,000 Less: Costs (B) (54,000) (50,000) (11,000) Operating Income (A-B) 153,000 105,000 74,000

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