CONFIDENTIAL QUESTION 6 (18 marks; 32.4 minutes) Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows: T-SHIRTSSWEATSHIRT Production and sales volume Selling price 60 000 units 35 000 units R29.00 R6.80 R16.00 Operating profit R3.50 Tiger Pride's managers have decided to revise their current assignment of overhead costs to reflect the following Activity-based Costing cost information: Activity Supervision Inspection Activity cost R100 920 R124 000 Direct labour hours (DLH) Inspections Activities demanded 0.75 DLH/unit 45 000 DLHs 60 000 inspections 1.2 DLH/unit 42 000 DLHs 17 500 inspections Required 6.1 Calculate the activity rate for the inspection activity under the revised ABC system. (1) 6.2 Calculate the inspection costs allocated to T-shirts under the revised ABC system. (2) 6.3 Calculate the total overhead costs allocated to T-shirts under the revised ABC svstem. (3) 6.4 Calculate the overhead costs per unit for the T-shirts under the revised ABC system. 2) Consider the following information on activities: Amount of Driver that Actual amount Cost per unit should be used of driver R40 R30 R20 used Activity (driver) 53 000 22 000 Purchasing (purchase orders) 48 000 Inspection (inspection hours) 4 Rework (labour hours) O 13 000 Required 6.5 Which of the three activities, if any, is value-added? why? 6.6 Calculate the non-value added cost of each activity 6.7 Calculate the total value-added cost of the activities. 48