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:

Using an ABC system, next year's estimates show manufacturing overhead costs will total $227,300 for 46,000 T-shirts. If all other T-shirt costs and sales prices remain the same, the profitability that can be expected is ________. (Round the final answer to the nearest whole cent.)
A) $8.60 per t-shirt
B) $4.94 per t-shirt
C) $3.66 per t-shirt
D) ($0.27) per t-shirt

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:

Using an ABC system, next year's estimates show manufacturing overhead costs will total $227,300 for 46,000 T-shirts. If all other T-shirt costs and sales prices remain the same, the profitability that can be expected is ________. (Round the final answer to the nearest whole cent.)
A) $8.60 per t-shirt 
B) $4.94 per t-shirt 
C) $3.66 per t-shirt 
D) ($0.27) per t-shirt

Quizplus · Accepted Answer

[46,000 ($18.00 - $1.60 - $4.30 - $3.50)] - $227,300 = $168,300 / 46,000 = $3.66

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