Answer the Following Questions Using the Information Below:
Tiger Pride

question 158

Multiple Choice

Answer the following questions using the information below:
Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows:
$\begin{array}{lrr}&\text { T-SHIRTS }&\text { SWEATSHIRTS }\\\text { Production and sales volume } & 60,000 \text { units } & 35,000 \text { units } \\\text { Selling price } & \$ 16.00 & \$ 29.00 \\\text { Direct material } & \$ 2.00 & \$ 5.00 \\\text { Direct labor } & \$ 4.50 & \$ 7.20 \\\text { Manufacturing overhead } & \$ 2.00 & \$ 3.00\\\text { Gross profit } & \$ 7.50 & \$ 13.80 \\\text { Selling and administrative } & \$ 4.00 & \$ 7.00 \\\text { Operating profit } & \$ 3.50 & \$ 6.80\end{array}$ What is projected operating income if direct materials costs of T-Shirts increase to $4.00 per unit and direct labor costs of Sweatshirts increase to $8.20 per unit?
-Under the revised ABC system,overhead costs per unit for the Sweatshirts will be ________.

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

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Definitions:

Admit To

To confess or acknowledge something, often referring to acceptance of a fact or situation.

Per Capita

A statistical measure expressed as the average per person for a given area, such as income per capita.

Distributing

The process of delivering or spreading out goods, services, or resources from a central point to multiple recipients or locations.

Estate

The total of all the property, assets, and debts left by an individual at death, or the property entrusted to an individual during their lifetime.