Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow:Rose VioletExpected sales (in cases)Selling price per caseDirect labor hoursMachine hoursReceiving ordersPacking ordersMaterial cost per caseDirect labor cost per case$9The 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.FixedDirect labor benefitsMachine costsReceiving departmentPacking departmentTotal costs* All depreciation55,000 11,000$10136,650 5,55010,350 3,200$50-97$49$822753Variable$215,220218,500* 291,180241,000126,000$585,500 $506,400$42$6Required: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 roundthe number of break-even packages to the nearest whole number.Break-even cases of RoseBreak-even cases of Violetcasescases2. 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 ofbreak-even packages to the nearest whole number.

CVP AnalysisThis tool of Cost and Management Accounting is termed as Cost-Volume-Profit Analysis as…

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) Selling price per case Direct labor hours Machine hours Receiving orders Packing orders Material cost per case Direct labor cost per case. The company uses a conventional Fixed $ Direct labor benefits Machine costs Receiving department Packing department Total costs *All depreciation 55,000 11,000 $101 $82 36,650 5,550 10,350 3,200 50 218,500 241,000 126,000 $585,500 Break-even cases of Rose Break-even cases of Violet 97 $49 $9 27 53 $42 $6 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. Variable $215,220 291,180 $506,400 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 roun the number of break-even packages to the nearest whole number. cases cases

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) Selling price per case Direct labor hours Machine hours Receiving orders Packing orders Material cost per case Direct labor cost per case. The company uses a conventional Fixed $ Direct labor benefits Machine costs Receiving department Packing department Total costs *All depreciation 55,000 11,000 $101 $82 36,650 5,550 10,350 3,200 50 218,500 241,000 126,000 $585,500 Break-even cases of Rose Break-even cases of Violet 97 $49 $9 27 53 $42 $6 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. Variable $215,220 291,180 $506,400 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 roun the number of break-even packages to the nearest whole number. cases cases

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 $49 Direct labor cost per case $12 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 $ Direct labor benefits Machine costs Receiving department Packing department Total costs Rose Violet 51,000 10,200 $100 36,750 9,250 52 98 All depreciation 211,000 212,500 149,000 $572 500 $83 6,400 2,700 24 51 $44 $8 Variable. $215,750 215,750 $431,500
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