Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows:
| Production and sales volume | 204,000 units | 34,000 units |
| Selling price | $18.00 | $29.00 |
| Direct material | $1.60 | $ 5.00 |
| Manufacturing overhead | $4.60 | $ 3.00 |
| Selling and administrative | $3.50 | $ 7.00 |
| Operating profit | $4.00 | $ 6.80 |
Tiger Pride's managers have decided to revise their current assignment of overhead costs to reflect the following ABC cost information:
| Activity | Activity cost | Activity-cost driver |
| Supervision | $130,560 | Direct labor hours (DLH) |
| Inspection | $69,300 | Inspections |
| T-SHIRTS | SWEATSHIRTS |
| 0.25 DLH/unit | 1.50 DLH/unit |
| 51,000 DLHs | 51,000 DLHs |
| 30,000 inspections | 19,500 inspections |
Using an ABC system, next year's estimates show manufacturing overhead costs will total $227,300 for 46,000 T-shirts. If all other T-shirt costs and sales prices remain the same, the profitability that can be expected is ________. (Round the final answer to the nearest whole cent.)
◦ $8.60 per t-shirt
◦ $4.94 per t-shirt
◦ $3.66 per t-shirt
◦ ($0.27) per t-shirt
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