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Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow: Rose Violet 58,500 11,700 $82 32,500 6,500 9,650 2,600 51 27 Expected sales (in cases) Selling price per case Direct labor hours Machine hours Receiving orders Packing orders Material cost per case $50 Direct labor cost per case $12 $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. Direct labor benefits Machine costs Receiving department Packing department Total costs *All depreciation Fixed $ 222,500 $98 114,000 102 55 $42 $183,300 210,000* 206,700 Variable $546,500 $390,000

Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow: Rose Violet 58,500 11,700 $82 32,500 6,500 9,650 2,600 51 27 Expected sales (in cases) Selling price per case Direct labor hours Machine hours Receiving orders Packing orders Material cost per case $50 Direct labor cost per case $12 $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. Direct labor benefits Machine costs Receiving department Packing department Total costs *All depreciation Fixed $ 222,500 $98 114,000 102 55 $42 $183,300 210,000* 206,700 Variable $546,500 $390,000

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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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. Break-even cases of Rose Break-even cases of Violet 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 f break-even packages to the nearest whole number. Break-even cases of Rose Break-even cases of Violet cases cases cases cases
Transcribed Image Text: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. Break-even cases of Rose Break-even cases of Violet 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 f break-even packages to the nearest whole number. Break-even cases of Rose Break-even cases of Violet cases cases 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: Direct labor benefits Machine costs Receiving department Packing department Total costs *All depreciation 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 $12 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 Rose Violet $ 58,500 11,700 $98 32,500 6,500 210,000 9.650 2,600 222,500 114,000 51 $82 102 $50 27 55 $42 $6 Variable $183,300 206,700 $546,500 $390,000
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: Direct labor benefits Machine costs Receiving department Packing department Total costs *All depreciation 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 $12 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 Rose Violet $ 58,500 11,700 $98 32,500 6,500 210,000 9.650 2,600 222,500 114,000 51 $82 102 $50 27 55 $42 $6 Variable $183,300 206,700 $546,500 $390,000
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