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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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