Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows:

Tiger Pride's managers have decided to revise their current assignment of overhead costs to reflect the following ABC cost information:

Under the revised ABC system, supervision costs allocated to Sweatshirts will be ________. (Do not round interim calculations. Round the final answer to the nearest whole dollar.)
A) $52,920
B) $104,800
C) $123,480
D) None of these answers are correct.

Question

Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows:

Tiger Pride's managers have decided to revise their current assignment of overhead costs to reflect the following ABC cost information:

Under the revised ABC system, supervision costs allocated to Sweatshirts will be ________. (Do not round interim calculations. Round the final answer to the nearest whole dollar.)
A) $52,920 
B) $104,800 
C) $123,480 
D) None of these answers are correct.

Quizplus · Accepted Answer

$123,480 / (48,000 dlh + 36,000 dlh) = $1.47 per dlh × 36,000 dlh = $52,920

Tiger Pride Produces Two Product Lines: T-Shirts and Sweatshirts