Good Scent, Inc., produces two colognes. Rose and Violet. Of the two. Rose is the more popular. Data concerning the two products follow:

The company uses a conventional cost system and assigns overhead costs to products using direct labor hours. Annual overhead costs are listed below. They are classified as fixed or variable with respect to direct labor hours.

Required:
1. Using the conventional approach, compute the number of cases of Rose and the num¬
ber of cases of Violet that must be sold for the company to break-even.
2. Using an activity-based approach, compute the number of cases of each product that must be sold for the company to break even.

Transcribed Image Text:

Rose Violet Expected sales (in cases) 50,000 10,000 Selling price per case $100 $80 Direct labor hours 36,000 6,000 Machine hours Receiving orders 10,000 3,000 50 25 Packing orders 100 50 Material cost per case $50 $43 Direct labor cost per case $10 $7