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Author Question: Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed ... (Read 94 times)

fagboi

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on: Mar 6, 2021

Question 1

Put the following ABC implementation steps in order ________.
ACompute the allocation rates.
BCompute the total cost of the products.
CIdentify the products that are the cost objects.
DSelect the cost allocation bases. 

◦ DACB
◦ DBCA
◦ BADC
◦ CDAB

Question 2

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

T-SHIRTSSWEATSHIRTS
Production and sales volume180,000 units24,000 units
Selling price$20.00$29.00
Direct material$1.80$ 5.00
Direct labor$4.70$ 7.20
Manufacturing overhead$6.00$ 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$97,200Direct labor hours (DLH)
Inspection$164,050Inspections

Activities demanded
T-SHIRTSSWEATSHIRTS
0.25 DLH/unit1.50 DLH/unit
45,000 DLHs36,000 DLHs
80,000 inspections16,500 inspections
Under the revised ABC system, the activity-cost driver rate for the supervision activity is  ________.
◦ $1.70
◦ $2.70
◦ $2.16
◦ $1.2
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by fagboi on Mar 6, 2021

Carliemb17

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Reply #1 on: Mar 6, 2021
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fagboi

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Reply 2 on: Mar 6, 2021
Excellent

rachel

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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