Question
Question 2 TPD Corporation produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows: T-SHIRTS SWEATSHIRTS Production and sales volume 64,000 units
Question 2
TPD Corporation 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
TPD Corporation'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 |
What is overhead costs per unit for the Sweatshirts Under the revised ABC system? (Do not round interim calculations. Round the final answer to the nearest cent)
Group of answer choices
$1.90/unit
$1.58/unit
$1.19/unit
$1.20/unit
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