Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows:
| Production and sales volume | 72,000 units | 26,250 units |
| Selling price | $15.00 | $29.00 |
| Direct material | $1.50 | $ 5.00 |
| Manufacturing overhead | $1.80 | $ 3.00 |
| 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:
| Activity | Activity cost | Activity-cost driver |
| Supervision | $108,480 | Direct labor hours (DLH) |
| Inspection | $93,000 | Inspections |
| T-SHIRTS | SWEATSHIRTS |
| 0.75 DLH/unit | 1.60 DLH/unit |
| 54,000 DLHs | 42,000 DLHs |
| 60,000 inspections | 17,500 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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