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: 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 Direct labor benefits Machine costs Receiving department Machine costs Receiving department Packing department Total costs All depreciation Rose Violet $ Break-even cases of Violet 58,000 11,600 Break-even cases of Rose Break-even cases of Violet $103 33,650 5,750 $12 The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhea costs follow. They are classified as fixed or variable with respect to direct labor hours. Fixed 9,400 2,750 52 99 $53 214,500 242,000 $81 242,000 135,500 $592,000 $394,000 27 214,500 193,060 49 $40 Variable $8 $200,940 193,060 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 o break-even packages to the nearest whole number. Break-even cases of Rose X cases cases 2. Using an activity-based approach, compute the number of cases of each product that must be sold for the company to break ev In your computations, round all computed amounts to the nearest cent and round the number of break-even packag to the nearest whole number. cases 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: 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 Direct labor benefits Machine costs Receiving department Machine costs Receiving department Packing department Total costs All depreciation Rose Violet $ Break-even cases of Violet 58,000 11,600 Break-even cases of Rose Break-even cases of Violet $103 33,650 5,750 $12 The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhea costs follow. They are classified as fixed or variable with respect to direct labor hours. Fixed 9,400 2,750 52 99 $53 214,500 242,000 $81 242,000 135,500 $592,000 $394,000 27 214,500 193,060 49 $40 Variable $8 $200,940 193,060 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 o break-even packages to the nearest whole number. Break-even cases of Rose X cases cases 2. Using an activity-based approach, compute the number of cases of each product that must be sold for the company to break ev In your computations, round all computed amounts to the nearest cent and round the number of break-even packag to the nearest whole number. cases cases
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:
Expected sales (in cases)
Selling price per case
Direct labor hours.
Machine hours
Receiving orders
Packing orders
Direct labor benefits.
Machine costs
Receiving department
Machine costs
Receiving department
Packing department
Total costs
*All depreciation
Break-even cases of Rose
Fixed
$
Break-even cases of Violet
Break-even cases of Rose
Material cost per case
Direct labor cost per case
The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhea
costs follow. They are classified as fixed or variable with respect to direct labor hours.
Rose
242,000
135,500
Break-even cases of Violet
58,000 11,600
$103
33,650
9,400
214,500
242,000
52
99
$53
Violet
$12
5,750
$81
2,750
$592,000 $394,000
214,500* 193,060
27
49
$40
Variable
$8
$200,940
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 o
break-even packages to the nearest whole number.
193,060
X cases
2. Using an activity-based approach, compute the number of cases of each product that must be sold for the company to break ev
In your computations, round all computed amounts to the nearest cent and round the number of break-even package
to the nearest whole number.
cases.
cases
cases](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0086c006-771a-4a18-9964-0eb5ef70a1a2%2F9a7a2084-50dd-4ff4-99cc-951b83bfe422%2Fabao7cb_processed.jpeg&w=3840&q=75)
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:
Expected sales (in cases)
Selling price per case
Direct labor hours.
Machine hours
Receiving orders
Packing orders
Direct labor benefits.
Machine costs
Receiving department
Machine costs
Receiving department
Packing department
Total costs
*All depreciation
Break-even cases of Rose
Fixed
$
Break-even cases of Violet
Break-even cases of Rose
Material cost per case
Direct labor cost per case
The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhea
costs follow. They are classified as fixed or variable with respect to direct labor hours.
Rose
242,000
135,500
Break-even cases of Violet
58,000 11,600
$103
33,650
9,400
214,500
242,000
52
99
$53
Violet
$12
5,750
$81
2,750
$592,000 $394,000
214,500* 193,060
27
49
$40
Variable
$8
$200,940
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 o
break-even packages to the nearest whole number.
193,060
X cases
2. Using an activity-based approach, compute the number of cases of each product that must be sold for the company to break ev
In your computations, round all computed amounts to the nearest cent and round the number of break-even package
to the nearest whole number.
cases.
cases
cases
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