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

Rose

Violet

Expected sales (in cases)

51,000

10,200

Selling price per case

$103

$81

Direct labor hours

32,250

5,500

Machine hours

10,350

3,150

Receiving orders

50

27

Packing orders

102

55

Material cost per case

$50

$45

Direct labor cost per case

$9

$6

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.

Fixed

Variable

Direct labor benefits

$

$177,425

Machine costs

187,000^*

237,825

Receiving department

210,500

Packing department

101,000

Total costs

$498,500

$415,250

^*All depreciation

Required:

1.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

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 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

Break-even cases of Violet