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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: Expected sales (in cases) Selling price per case Direct labor hours. Machine hours Receiving orders Packing orders. Material cost per case Direct labor cost per case Direct labor benefits. Machine costs Receiving department Packing department Total costs All depreciation Fixed $ $8 $9 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. Break-even cases of Rose Rose Break-even cases of Violet 53,000 10,600 $103 $81 33,500 6,400 10,850 3,100 52 Break-even cases of Rose 101 Break-even cases of Violet Violet $48 $191,520 190,000* 207,480 231,000 147,500 $568,500 $399,000 28 55 $42 Variable 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. X 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. cases cases cases

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: Expected sales (in cases) Selling price per case Direct labor hours. Machine hours Receiving orders Packing orders. Material cost per case Direct labor cost per case Direct labor benefits. Machine costs Receiving department Packing department Total costs All depreciation Fixed $ $8 $9 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. Break-even cases of Rose Rose Break-even cases of Violet 53,000 10,600 $103 $81 33,500 6,400 10,850 3,100 52 Break-even cases of Rose 101 Break-even cases of Violet Violet $48 $191,520 190,000* 207,480 231,000 147,500 $568,500 $399,000 28 55 $42 Variable 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. X 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. cases cases cases

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 42P: Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data...
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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: Expected sales (in cases) Selling price per case Direct labor hours Machine hours Receiving orders Packing orders Material cost per case Direct labor cost per case Direct labor benefits Machine costs Receiving department Packing department Total costs All depreciation Fixed $ $8 $9 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. Break-even cases of Rose Rose Violet Break-even cases of Violet 53,000 10,600 $103 $81 6,400 3,100 Break-even cases of Rose 33,500 10,850 Break-even cases of Violet 52 101 Variable $191,520 190,000* 207,480 231,000 147,500 $568,500 $399,000 $48 28 55 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. $42 X 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. cases cases cases
Transcribed Image Text: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: Expected sales (in cases) Selling price per case Direct labor hours Machine hours Receiving orders Packing orders Material cost per case Direct labor cost per case Direct labor benefits Machine costs Receiving department Packing department Total costs All depreciation Fixed $ $8 $9 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. Break-even cases of Rose Rose Violet Break-even cases of Violet 53,000 10,600 $103 $81 6,400 3,100 Break-even cases of Rose 33,500 10,850 Break-even cases of Violet 52 101 Variable $191,520 190,000* 207,480 231,000 147,500 $568,500 $399,000 $48 28 55 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. $42 X 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. cases cases cases
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