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ABC and CVP Analysis: Multiple Products Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow: Rose Violet Expected sales (in cases) Selling price per case Direct labor hours Machine hours Receiving orders Packing orders Material cost per case Direct labor benefits Machine costs Receiving department. Packing department 46 $43 Direct labor cost per case $8 $6 The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhead costs follow. They are classified as fixed or variable with respect to direct labor hours. Fixed Total costs *All depreciation 49,500 9,900 $101 $80 34,850 5,700 9,750 2,500 $ 190,000 222,500 116,000 52 $528,500 95 28 $49 Variable $170,310 316,290 $486,600 Required: 1. Using the conventional approach, compute the number of cases of Rose and the number of cases of Violet that must be sold for the company to break even. In your computations, round variable unit cost to the nearest cent and round the break-even packages to the nearest whole number. Break-even cases of Rose 13.090 ✓cases Break-even cases of Violet 2.610 cases

ABC and CVP Analysis: Multiple Products Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow: Rose Violet Expected sales (in cases) Selling price per case Direct labor hours Machine hours Receiving orders Packing orders Material cost per case Direct labor benefits Machine costs Receiving department. Packing department 46 $43 Direct labor cost per case $8 $6 The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhead costs follow. They are classified as fixed or variable with respect to direct labor hours. Fixed Total costs *All depreciation 49,500 9,900 $101 $80 34,850 5,700 9,750 2,500 $ 190,000 222,500 116,000 52 $528,500 95 28 $49 Variable $170,310 316,290 $486,600 Required: 1. Using the conventional approach, compute the number of cases of Rose and the number of cases of Violet that must be sold for the company to break even. In your computations, round variable unit cost to the nearest cent and round the break-even packages to the nearest whole number. Break-even cases of Rose 13.090 ✓cases Break-even cases of Violet 2.610 cases

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC and CVP Analysis: Multiple Products Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow: Violet Expected sales (in cases) Selling price per case Direct labor hours. Machine hours Receiving orders Packing orders Material cost per case Direct labor cost per case $8 The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhead costs follow. They are classified as fixed or variable with respect to direct labor hours. Fixed Direct labor benefits Machine costs Receiving department Packing department Total costs * All depreciation $ Rose 49,500 9,900 $101 $80 34,850 5,700 9,750 2,500 222,500 116,000 52 Break-even cases of Rose Break-even cases of Violet 95 $49 28 46 Variable $170,310 190,000 316,290 $43 $6 $528,500 $486,600 Required: 1. Using the conventional approach, compute the number of cases of Rose and the number of cases of Violet that must be sold for the company to break even. In your computations, round variable unit cost to the nearest cent and round the number of break-even packages to the nearest whole number. 13,090 cases 2,618 ✔✔ cases
Transcribed Image Text:ABC and CVP Analysis: Multiple Products Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow: Violet Expected sales (in cases) Selling price per case Direct labor hours. Machine hours Receiving orders Packing orders Material cost per case Direct labor cost per case $8 The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhead costs follow. They are classified as fixed or variable with respect to direct labor hours. Fixed Direct labor benefits Machine costs Receiving department Packing department Total costs * All depreciation $ Rose 49,500 9,900 $101 $80 34,850 5,700 9,750 2,500 222,500 116,000 52 Break-even cases of Rose Break-even cases of Violet 95 $49 28 46 Variable $170,310 190,000 316,290 $43 $6 $528,500 $486,600 Required: 1. Using the conventional approach, compute the number of cases of Rose and the number of cases of Violet that must be sold for the company to break even. In your computations, round variable unit cost to the nearest cent and round the number of break-even packages to the nearest whole number. 13,090 cases 2,618 ✔✔ cases
2. Using an activity-based approach, compute the number of cases of each product that must be sold for the company to break even. In your computations, round all computed amounts to the nearest cent and round the number of break-even packages to the nearest whole number. Break-even cases of Rose Break-even cases of Violet X cases X cases
Transcribed Image Text:2. Using an activity-based approach, compute the number of cases of each product that must be sold for the company to break even. In your computations, round all computed amounts to the nearest cent and round the number of break-even packages to the nearest whole number. Break-even cases of Rose Break-even cases of Violet X cases X cases
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