Required: 1. Compute the break-even point in units using conventional analysis. units 2. Compute the break-even point in units using activity-based analysis. units 3. Suppose that Busy-Bee could reduce the setup cost by $100 per setup and could reduce the number of maintenance hours needed to 1,050. How many units must be sold to break even in this case? Round your answer up to the next higher whole unit (for example, 50.3 units rounds to 51). Junits
Required: 1. Compute the break-even point in units using conventional analysis. units 2. Compute the break-even point in units using activity-based analysis. units 3. Suppose that Busy-Bee could reduce the setup cost by $100 per setup and could reduce the number of maintenance hours needed to 1,050. How many units must be sold to break even in this case? Round your answer up to the next higher whole unit (for example, 50.3 units rounds to 51). Junits
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Busy-Bee Baking Company

Transcribed Image Text:CVP with Activity-Based Costing
Busy-Bee Baking Company produces a variety of breads. The average price of a loaf of bread is $1. Costs are as follows:
Unit Variable
Level of Cost
Cost Driver
Cost
Driver
Units sold
$0.65
Setups
$296
155
Maintenance hours
$12
2,440
Other data:
Total fixed costs (traditional)
$141,365
Total fixed costs (ABC)
66,205
Required:
1. Compute the break-even point in units using conventional analysis.
units
2. Compute the break-even point in units using activity-based analysis.
units
3. Suppose that Busy-Bee could reduce the setup cost by $100 per setup and could reduce the number of maintenance hours needed to 1,050. How
many units must be sold to break even in this case? Round your answer up to the next higher whole unit (for example, 50.3 units rounds to 51).
units
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