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Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows: T-SHIRTS SWEATSHIRTS Production and sales volume 63,000 units 34,000 units
Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows: T-SHIRTS SWEATSHIRTS Production and sales volume 63,000 units 34,000 units Selling price $16.00 $29.00 Direct material $3.00 $5.00 Direct labor $4.50 $8.20 Manufacturing overhead $2.00 $3.00 Gross profit $6.50 $12.80 Selling and administrative $4.00 $7.00 Operating profit $2.50 $5.80 What is the projected decline in operating income if the direct materials costs of T-Shirts increase to $4.50 per unit and direct labor costs of Sweatshirts increase to $14.00 per unit? O A. $759,500 OB. $197,200 OC. $291,700 OD. $94,500
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