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 50,000 $100 10,000 80 36,000 10,000 6,000 3,000 Machine hours Receiving orders Packing orders Material cost per case Direct labor cost per case 50 25 100 50 S50 S43 s10 $7 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 Variable Direct labor benefits $200,000 262,000 Machine costs 200,000* Receiving department Packing department 225,000 125,000 S550,000 Total costs $462,000 *All depreciation.

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 50,000 $100 10,000 80 36,000 10,000 6,000 3,000 Machine hours Receiving orders Packing orders Material cost per case Direct labor cost per case 50 25 100 50 S50 S43 s10 $7 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 Variable Direct labor benefits $200,000 262,000 Machine costs 200,000* Receiving department Packing department 225,000 125,000 S550,000 Total costs $462,000 *All depreciation.

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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