Production and sales volume Selling price ity is lyzed as follows: Direct material Direct labour Manufacturing overhead Gross profit Selling and administrative Operating profit a. b. C. d. Activity Supervision Inspection T-SHIRTS 60,000 units £16.00 Lion Pride's managers have decided to revise their current assignment of overhead costs to reflect the following ABC cost information: Activity cost £100,920 £124,000 £ 2.00 £4.50 £ 2.00 £ 7.50 £4.00 £ 3.50 T-SHIRTS 0.75 DLH/unit 45,000 DLHS 60,000 inspections SWEATSHIRTS 35,000 units £29.00 Activities demanded £5.00 £7.20 £3.00 £13.80 £ 7.00 £ 6.80 Activity-cost driver Direct labour hours (DLH) Inspections SWEATSHIRTS 1.2 DLH/unit 42,000 DLHS 17,500 inspections Under the revised ABC system, total overhead costs allocated to Sweatshirts will be £ 48,720. £ 76,720. £224,920. none of the above.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Production and sales volume
Selling price
lity is yzed as follows:
Direct material
Direct labour
Manufacturing overhead
Gross profit
Selling and administrative
Operating profit
a.
b.
C.
d.
Activity
Supervision
Inspection
T-SHIRTS
60,000 units
£16.00
Lion Pride's managers have decided to revise their current assignment of overhead costs
to reflect the following ABC cost information:
Activity cost
£100,920
£124,000
£ 2.00
£4.50
£ 2.00
£ 7.50
£4.00
£ 3.50
T-SHIRTS
0.75 DLH/unit
45,000 DLHS
60,000 inspections
SWEATSHIRTS
35,000 units
£29.00
Activities demanded
£5,00
£7.20
£3.00
£13.80
£ 7.00
£ 6.80
Activity-cost driver
Direct labour hours (DLH)
Inspections
SWEATSHIRTS
1.2 DLH/unit
42,000 DLHS
17,500 inspections
Under the revised ABC system, total overhead costs allocated to Sweatshirts will be
£ 48,720.
£ 76,720.
£224,920.
none of the above.
Transcribed Image Text:Production and sales volume Selling price lity is yzed as follows: Direct material Direct labour Manufacturing overhead Gross profit Selling and administrative Operating profit a. b. C. d. Activity Supervision Inspection T-SHIRTS 60,000 units £16.00 Lion Pride's managers have decided to revise their current assignment of overhead costs to reflect the following ABC cost information: Activity cost £100,920 £124,000 £ 2.00 £4.50 £ 2.00 £ 7.50 £4.00 £ 3.50 T-SHIRTS 0.75 DLH/unit 45,000 DLHS 60,000 inspections SWEATSHIRTS 35,000 units £29.00 Activities demanded £5,00 £7.20 £3.00 £13.80 £ 7.00 £ 6.80 Activity-cost driver Direct labour hours (DLH) Inspections SWEATSHIRTS 1.2 DLH/unit 42,000 DLHS 17,500 inspections Under the revised ABC system, total overhead costs allocated to Sweatshirts will be £ 48,720. £ 76,720. £224,920. none of the above.
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