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Author Question: Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed ... (Read 99 times)

jon_i

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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 volume72,000 units26,250 units
Selling price$15.00$29.00
Direct material$1.50$ 5.00
Direct labor$4.20$ 7.20
Manufacturing overhead$1.80$ 3.00
Gross profit$ 7.50$13.80
Selling and administrative$3.60$ 7.00
Operating profit$3.90$ 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$108,480Direct labor hours (DLH)
Inspection$93,000Inspections
Activities demanded
T-SHIRTSSWEATSHIRTS
0.75 DLH/unit1.60 DLH/unit
54,000 DLHs42,000 DLHs
60,000 inspections17,500 inspections
Under the revised ABC system, total overhead costs allocated to Sweatshirts will be ________.
◦ $47,460
◦ $68,460
◦ $201,480
◦ None of these answers are correct.


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Marked as best answer by jon_i on Mar 6, 2021

nanny

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jon_i

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


Zebsrer

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Reply 3 on: Yesterday
Gracias!

 

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