ABC and CVP Analysis: Multiple ProductsGood Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two productsfollow:Expected sales (in cases)Selling price per caseDirect labor hours.Machine hoursReceiving ordersPacking ordersDirect labor benefits.Machine costsReceiving departmentMachine costsReceiving departmentPacking departmentTotal costs*All depreciationBreak-even cases of RoseFixed$Break-even cases of VioletBreak-even cases of RoseMaterial cost per caseDirect labor cost per caseThe company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overheacosts follow. They are classified as fixed or variable with respect to direct labor hours.Rose242,000135,500Break-even cases of Violet58,000 11,600$10333,6509,400214,500242,0005299$53Violet$125,750$812,750$592,000 $394,000214,500* 193,0602749$40Variable$8$200,940Required:1. Using the conventional approach, compute the number of cases of Rose and the number of cases of Violet that must be sold forthe company to break even. In your computations, round variable unit cost to the nearest cent and round the number obreak-even packages to the nearest whole number.193,060X cases2. Using an activity-based approach, compute the number of cases of each product that must be sold for the company to break evIn your computations, round all computed amounts to the nearest cent and round the number of break-even packageto the nearest whole number.cases.casescases

Break-even sales is the dollar amount of revenue at which a business earns a profit of zero i.e. No…

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 Machine costs Receiving department Packing department Total costs All depreciation Rose Violet $ Break-even cases of Violet 58,000 11,600 Break-even cases of Rose Break-even cases of Violet $103 33,650 5,750 $12 The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhea costs follow. They are classified as fixed or variable with respect to direct labor hours. Fixed 9,400 2,750 52 99 $53 214,500 242,000 $81 242,000 135,500 $592,000 $394,000 27 214,500 193,060 49 $40 Variable $8 $200,940 193,060 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 o break-even packages to the nearest whole number. Break-even cases of Rose X cases cases 2. Using an activity-based approach, compute the number of cases of each product that must be sold for the company to break ev In your computations, round all computed amounts to the nearest cent and round the number of break-even packag to the nearest whole number. cases cases

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter18: Activity-based Costing

Section: Chapter Questions

Problem 17E: Evaluating selling and administrative cost allocations Gordon Gecco Furniture Company has two major...