1. Compute the break-even point in units using conventional analysis. $400000 2. Compute the break-even point in units using activity-based analysis. $400000 3. Suppose that Busy-Bee could reduce the setup cost by $100 per setup and could reduce the number of maintenance hours needed to 1,000. How many units must be sold to break even in this case? Round your answer up to the next higher whole unit (for example, 50.3 units rounds to 51).
1. Compute the break-even point in units using conventional analysis. $400000 2. Compute the break-even point in units using activity-based analysis. $400000 3. Suppose that Busy-Bee could reduce the setup cost by $100 per setup and could reduce the number of maintenance hours needed to 1,000. How many units must be sold to break even in this case? Round your answer up to the next higher whole unit (for example, 50.3 units rounds to 51).
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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CVP with Activity-Based Costing
Busy-Bee Baking Company produces a variety of breads. The average price of a loaf of bread is $1. Costs are as follows:
Cost Driver |
Unit Variable Cost |
Level of Cost Driver |
| Units sold | $0.65 | — |
| Setups | $300 | 150 |
| Maintenance hours | $15 | 2,500 |
| Other data: | ||
| Total fixed costs (traditional) | $140,000 | |
| Total fixed costs (ABC) | 57,500 |
Required:
1. Compute the break-even point in units using conventional analysis. $400000
2. Compute the break-even point in units using activity-based analysis. $400000
3. Suppose that Busy-Bee could reduce the setup cost by $100 per setup and could reduce the number of maintenance hours needed to 1,000. How many units must be sold to break even in this case? Round your answer up to the next higher whole unit (for example, 50.3 units rounds to 51).
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