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 caseDirect labor hoursMachine hoursReceiving ordersPacking ordersMaterial cost per caseDirect labor cost per caseThe company uses a conventionalDirect labor benefitsMachine costsReceiving departmentPacking departmentTotal costsAll depreciationFixed$Rose VioletBreak-even cases of RoseBreak-even cases of Violet47,000 9,400$103 $8035,800 5,55010,250 2,700$53$12costing 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.Variable$210,885186,500 243,965233,000142,500$562,000 $454,850Break-even cases of RoseBreak-even cases of Violet511042455Required: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-evenpackages to the nearest whole number.$42$5casescases2. 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 thenearest whole number.casescases

The overhead is allocated to the production on the basis of pre-determined overhead rate. The…

Answered: Good Scent, Inc., produces two…

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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Bluefield Corporation has two product lines, A and B. Bluefield has identified the following information about its overhead and potential cost drivers: Total overhead Cost drivers Number of labor hours Number of machine hours Required: 1. Suppose Bluefield Corporation uses a traditional costing system with number of labor hours as the cost driver. Determine the amount of overhead assigned to each product line if Product A requires 64 percent of the labor hours and Product B requires 36 percent. 2. Suppose Bluefield uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line if Product A requires 17,500 machine hours and Product B requires 32,500. Complete this question by entering your answers in the tabs below. Required 1 Required 2 $ 79,000 2,200 50,000 Suppose Bluefield Corporation uses a traditional costing system with number of labor hours as the cost driver. Determine the amount of overhead assigned to…
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The Compressor Division and the Fabrication Division of Plash Company, which exclusively produces one type of washing machine, respectively, are its two divisions. For the Fabrication Division, which completes the washing machine and sells it to retailers, the Compressor Division makes compressors. The Fabrication Division buys compressors from the Compressor Division. The Fabrication Division will spend $40.00 on a compressor, which is the market price. (Skip updates to the inventory.) It is expected that the fixed costs for the Compressor Division remain constant for orders between 5,000 and 10,000 units. The Fabrication Division's fixed expenses are estimated to be $7.50 per unit at 10,000 units. Compressor's costs per compressor are: Direct materials $15.00 Direct labor $7.25 Variable overhead $3.00 Division fixed costs $7.50 Fabrication's costs per completed air conditioner are: Direct materials $150.00 Direct labor $62.50 Variable overhead $20.00 Division fixed costs $7.50 Assume…
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