Author Question: Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed ... (Read 103 times)

Charlie · **on:** Mar 6, 2021

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

T-SHIRTS

SWEATSHIRTS

Production and sales volume

64,000 units

40,000 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:

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

Activities demanded

T-SHIRTS	SWEATSHIRTS
0.75 DLH/unit	1.20 DLH/unit
48,000 DLHs	48,000 DLHs
40,000 inspections	18,500 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

bimper21 · **Reply #1 on:** Mar 6, 2021

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