Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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 Violet Rose Expected sales (in cases) 50,000 10,000 Selling price per case $100 $80 Direct labor hours 36,000 6,000 3.000 Machine hours 10.000 25 Receiving orders 50 Packing orders 100 50 Material cost per case $50 $43 Direct labor cost per case $10 $7 The company uses a conventional costing system and assigns overhead costs to products using di rect labor hours. Annual overhead costs follow. They are classified as fixed or variable with respect to direct labor hours. Fixed Variable Direct labor benefits $200,000 Machine costs 200,000 262,000 Receiving department 225,000 Packing department 125,000 $550,000 $462,000 Total costs All deprediation Required: 1. Using the conventional approach, compute the number cases of Rose and the number of cases of Violet that must be sold for the company to break even. 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 Rose cases Break-even cases Violet cases 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 computed amounts to the nearest cent and round the number of break-even packages to the nearest whole number. Break-even cases Rose cases Violet Break-even cases cases
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started