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Author Question: Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed ... (Read 95 times)

Charlie

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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 volume64,000 units40,000 units
Selling price$16.00$29.00
Direct material$2.50$ 5.00
Direct labor$4.30$ 7.20
Manufacturing overhead$1.70$ 3.00
Gross profit$ 7.50$13.80
Selling and administrative$4.30$ 7.00
Operating profit$3.20$ 6.80

Tiger Pride's managers have decided to revise their current assignment of overhead costs to reflect the following ABC cost information:

ActivityActivity costActivity-cost driver
Supervision$107,520Direct labor hours (DLH)
Inspection$70,200Inspections

Activities demanded
T-SHIRTSSWEATSHIRTS
0.75 DLH/unit1.20 DLH/unit
48,000 DLHs48,000 DLHs
40,000 inspections18,500 inspections
Under the revised ABC system, overhead costs per unit for the Sweatshirts will be ________. (Do not round interim calculations. Round the final answer to the nearest cent)
◦ $1.19 per unit
◦ $1.20 per unit
◦ $1.90 per unit
◦ $1.58 per unit


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Marked as best answer by Charlie on Mar 6, 2021

bimper21

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Charlie

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Reply 2 on: Mar 6, 2021
Thanks for the timely response, appreciate it


skipfourms123

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Reply 3 on: Yesterday
:D TYSM

 

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