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Author Question: Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed ... (Read 443 times)

lb_gilbert

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

T-SHIRTSSWEATSHIRTS
Production and sales volume67,000 units20,000 units
Selling price$16.00$29.00
Direct material$2.00$ 5.00
Direct labor$ 4.50$8.20
Manufacturing overhead$ 2.00$ 3.00
Gross profit$7.50$12.80
Selling and administrative$ 4.00$ 7.00
Operating profit$3.50$5.80

What is the projected decline in operating income if the direct materials costs of T-Shirts increase to $3.50 per unit and direct labor costs of Sweatshirts increase to $14.00 per unit?
◦ $216,500
◦ $100,500
◦ $116,000
◦ $514,500


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Marked as best answer by lb_gilbert on Mar 6, 2021

jaykayy05

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