Author Question: Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed ... (Read 93 times)

jerry coleman · **on:** Mar 6, 2021

Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows:

T-SHIRTS

SWEATSHIRTS

Production and sales volume

192,000 units

24,000 units

Selling price

$17.00

$29.00

Direct material

$1.70

$ 5.00

Direct labor

$4.30

$ 7.20

Manufacturing overhead

$3.50

$ 3.00

Gross profit

$ 7.50

$13.80

Selling and administrative

$4.10

$ 7.00

Operating profit

$3.40

$ 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	$123,480	Direct labor hours (DLH)
Inspection	$104,800	Inspections

Activities demanded

T-SHIRTS	SWEATSHIRTS
0.25 DLH/unit	1.50 DLH/unit
48,000 DLHs	36,000 DLHs
50,000 inspections	15,500 inspections

Under the revised ABC system, supervision costs allocated to Sweatshirts will be ________. (Do not round interim calculations. Round the final answer to the nearest whole dollar.)
◦ $52,920
◦ $104,800
◦ $123,480
◦ None of these answers are correct.

joshraies · **Reply #1 on:** Mar 6, 2021

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