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 currently assigns manufacturing overhead completely randomly but would like to do a better job.

13. Suppose that the company decides to allocate total overhead on the basis of direct labor cost. How much total overhead costs will be allocated to Sweatshirts?

1. 117,000
2. 111,800
3. 120,000
4. 288,000