Answer the Following Questions Using the Information Below:
Ghan Collectibles

question 73

Multiple Choice

Answer the following questions using the information below:
Ghan Collectibles produces T-shirts and sweatshirts.Product profitability is analysed as follows:
$\begin{array} { l r r } & \text { T-SHIRTS } & \text { SWEATSHIRTS } \\ \text { Production and sales volume } & 60000 \text { units } & 35000 \text { urits } \\ \text { Selling price } & \$ 16.00 & \$ 29.00 \\ \text { Direct material } & \$ 2.00 & \$ 5.00 \\ \text { Direct labour } & \$ 4.50 & \$ 7.20 \\ \text { Manufacturing overhead } & \$ 2.00 & \$ 3.00 \\ \text { Gross profit } & \$ 7.50 & \$ 13.80 \\ \text { Selling and administrative } & \$ 4.00 & \$ 7.00 \\ \text { Operating profit } & \$ 3.50 & \$ 6.80 \end{array}$

Ghan Collectibles's managers have decided to revise their current assignment of overhead costs to reflect the following $\mathrm { ABC }$ cost information:

$\begin{array}{c}\text { Activities demanded }\\\begin{array}{rr}\text { T-SHIRTS } & \text { SWEATSHIRTS } \\0.75 \mathrm{DLH} / \text { unit } & 1.2 \mathrm{DLH} / \mathrm{unit} \\45000 \mathrm{DLHs} & 42000 \mathrm{DLHs} \\60000 \text { inspections } & 17500 \text { inspections }\end{array}\end{array}$
-Under the revised ABC system,overhead costs per unit for the sweatshirts will be:

• A)$1.60 per unit
• B)$1.39 per unit
• C)$2.19 per unit
• D)$2.47 per unit

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Definitions:

Meters

The fundamental unit of length in the metric system, equivalent to 100 centimeters or approximately 39.37 inches.

Curtains

Fabric pieces designed to cover windows, control light, provide privacy, and contribute to a room's aesthetic.

Feet

A unit of measurement equal to 12 inches, used primarily in the United States for measuring length.

Grams

This represents a quantity of mass in the metric system, exactly 1/1000th of a kilogram.