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Question - 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
$212,000
$58,000
$45,900
Product 137Y
165,000
50,000
39,000
Product 249S
82,000
20,000
43,100
Required - For each product line, compute the operating income using the traditional costing system.
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