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Company X produces two product lines: T-shirts and Sweatshirts. Product profitab...
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Company X produces two product lines: T-shirts
and Sweatshirts. Product profitability is analyzed as follows:
|
T-SHIRTS
|
SWEATSHIRTS
|
Production and sales volume
|
72000 units
|
30000 units
|
Selling price
|
$16
|
$29
|
DM
|
$2.5
|
$5
|
DL
|
$4.8
|
$7.2
|
Manufacturing OH
|
$1.2
|
$3
|
Gross profit
|
$7.5
|
$13.8
|
Selling and administrative
|
$3.9
|
$7
|
Operating profit
|
$3.6
|
$6.8
|
Company X's managers have decided to revise their current assignment of overhead costs to reflect the following ABC cost information:
Activity
|
Activity cost
|
Activity-cost driver
|
Supervision
|
$144840
|
Direct labor hours (DLH)
|
Inspection
|
$132397
|
Inspections
|
Activities Demanded
T-SHIRTS
|
SWEATSHIRTS
|
0.75 DLH/unit
|
1.60 DLH/unit
|
54000 DLHs
|
48000 DLHs
|
50000 inspections
|
20000 inspections
|
Under the revised ABC system, overhead costs per unit for the Sweatshirts will be: (Round the final answer to the nearest cent)