Question

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.

				Total 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

For each product line, compute operating income using the traditional costing system.

Product 540X		$enter a dollar amount
Product 137Y		$enter a dollar amount
Product 249S

b) For each product line, compute operating income using the activity-based costing system
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)]divided operating Income (traditional cost)(round the percentage to two decimals).

Answer 1