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traditional) ABC) Cost $0.61 $296 $17 $157,053 73,837 Driver 141 2,440

traditional) ABC) Cost $0.61 $296 $17 $157,053 73,837 Driver 141 2,440

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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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 Cost Cost Driver Units sold Setups Maintenance hours Other data: Total fixed costs (traditional) Total fixed costs (ABC) Required: $0.61 $296 $17 $157,053 73,837 Level of Cost Driver 141 2,440 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 $97 per setup and could reduce the number of maintenance hours needed to 1,000. 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
Transcribed Image Text: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 Cost Cost Driver Units sold Setups Maintenance hours Other data: Total fixed costs (traditional) Total fixed costs (ABC) Required: $0.61 $296 $17 $157,053 73,837 Level of Cost Driver 141 2,440 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 $97 per setup and could reduce the number of maintenance hours needed to 1,000. 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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