Good Scent Inc Produces Two Colognes Rose And Violet Of The Two Rose Is More Popular Data Concerning The Two Prod 1 (85.13 KiB) Viewed 38 times
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) 45,000 9,000 Selling price per case $98 $79 Direct labor hours 36,000 5,950 Machine hours 10,200 3,500 Receiving orders 52 28 Packing orders 104 53 Material cost per case $49 $41 Direct labor cost per case $8 $7 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 $ $201,360 Machine costs 181,500 260,090 Receiving department 217,500 Packing department 107,500 Total costs $506,500 $461,450 *
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 cases Break-even cases of 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 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
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