Finney Inc. has conducted an analysis of overhead costs related to one of its product lines using a traditional costing system (volume-based) and an activity-based costing system. Here are its results.
|
Traditional Costing |
ABC |
|
|
Sales revenue |
600,000 |
600,000 |
|
Overhead costs: |
||
|
Product Rx3 |
34,000 |
50,000 |
|
Product Y12 |
36,000 |
20,000 |
|
$70,000 |
$70,000 |
Explain how a difference in the overhead costs between the two systems may have occurred.