1C1E LOYAL CO. PRODUCES THREE TYPES OF MEN’S UNDERSHIRTS

163. CSO: 1C1c LOS: 1C1e

Loyal Co. produces three types of men’s undershirts: T-shirts, V-neck shirts, and athletic

shirts. In the Folding and Packaging Department, operations costing is used to apply

costs to individual units, based on the standard time allowed to fold and package each

type of undershirt. The standard time to fold and package each type of undershirt is as

follows.

T-shirt 40 seconds per shirt

V-neck shirt 40 seconds per shirt

Athletic shirt 20 seconds per shirt

59

During the month of April, Loyal produced and sold 50,000 T-shirts, 30,000 V-neck

shirts, and 20,000 athletic shirts. If costs in the Folding and Packaging Department were

$78,200 during April, how much folding and packaging cost should be applied to each T-

shirt?

a. $.52134.

b. $.6256.

c. $.7820.

d. $.8689.