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Tiger Pride produces two product? lines: T−shirts and Sweatshirts

Accounting

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

T−SHIRTS

SWEATSHIRTS

Production and sales volume

?64,000 units

?40,000 units

Selling price

?$16.00

?$29.00

Direct material

?$2.50

?$5.00

Direct labor

?$4.30

?$7.20

Manufacturing overhead

?$1.70

?$3.00

Gross profit

?$7.50

?$13.80

Selling and administrative

?$4.30

?$7.00

Operating profit

?$3.20

?$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

Activity−cost driver

Supervision

?$107,520

Direct labor hours? (DLH)

Inspection

?$70,200

Inspections

Activities demanded

T−SHIRTS

SWEATSHIRTS

0.75? DLH/unit

1.20? DLH/unit

?48,000 DLHs

?48,000 DLHs

?40,000 inspections

?18,500 inspections

Under the revised ABC? system, overhead costs per unit for the Sweatshirts will be? ________. (Do not round interim calculations. Round the final answer to the nearest? cent)

A.

?$1.19 per unit

B.

?$1.58 per unit

C.

?$1.90 per unit

D.

?$1.20 per unit