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:

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.

All depreciation

Required:

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

cases

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 of break$-$even packages to the nearest whole number.

Break$-$even cases of Rose

cases

Break$-$even cases of Violet

cases