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jerico jerico
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Posts: 4603
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6 years ago
Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows:

   T-SHIRTS   SWEATSHIRTS
Production and sales volume   60,000 units   35,000 units
Selling price   $16.00   $29.00
Direct material   $ 2.00   $ 5.00
Direct labor   $ 4.50   $ 7.20
Manufacturing overhead   $ 2.00   $ 3.00
Gross profit   $ 7.50   $13.80
Selling and administrative   $ 4.00   $ 7.00
   Operating profit   $ 3.50   $ 6.80

What is the projected decline in operating income if the direct materials costs of T-Shirts increase to $3.50 per unit and direct labor costs of Sweatshirts increase to $13.00 per unit?
A) $293,000
B) $90,000
C) $203,000
D) $473,000
Textbook 

Cost Accounting


Edition: 14th
Authors:
Read 1845 times
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cyborgcyborg
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6 years ago
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6 years ago
This solved my problem perfectly, thank you for your kind input.
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6 years ago
Sweet, you're welcome.
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A month ago
Thank you so much
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