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    This addresses the Tiger Pride profitability exercise.

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

    T-SHIRTS SWEATSHIRTS
    Production & Sales Volume - Units 60,000 35,000
    Selling Price $16.00 $29.00
    Direct Materials $2.00 $5.00
    Direct Labor $4.50 $7.20
    Manufacturing Ohd $2.00 $3.00
    Gross Profit $7.50 $13.80
    Selling and Admin $4.00 $7.00
    Operating Profit $3.50 $6.80

    Tiger Pride's managers have decided to revise their current assignment of overhead costs to reflect the following ABC cost information:
    Activity Activity Cost Cost Driver
    Supervision $100,920 Direct Labor Hours
    Inspection $124,000 Inspections
    ACTIVTIES DEMANDED:
    T-SHIRTS SWEATSHIRTS
    .75 DLH/Unit 1.2 DLH/Unit
    45,000 DLHs 42,000 DLHs
    60,000 Inspections 17,500 Inspections

    18. Under the revised ABC system, total overhead costs allocated to Sweatshirts will be:

    a $48,720
    b $76,720
    c $224,920
    d None of the answers are correct.

    19. Under the revised ABC system, overhead cost 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

    20. Using an ABC system, next year's estimates show manufacturing overhead costs will total $228,300 for 52,000 T-Shirts. If all other T-shirt costs and sales prices remain the same, the profitability that can be expected is:

    a $5.41 per T-shirt.
    b $4.39 per T-shirt.
    c $1.11 per T-shirt.
    d ($0.81) per T-Shirt

    © BrainMass Inc. brainmass.com June 4, 2020, 2:49 am ad1c9bdddf
    https://brainmass.com/business/accounting/this-addresses-the-tiger-pride-profitability-exercise-482054

    Solution Preview

    18. b $76,720

    $124,000 / (60,000 + 17,500) = $1.60 x 17,500= $28,000 + ...

    Solution Summary

    This solution provides the correct answers and calculations to the Tiger Pride exercise.

    $2.19

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