Busy-Bee Baking Company produces a variety of breads. The average price of a loaf of...
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Accounting
Busy-Bee Baking Company produces a variety of breads. The average price of a loaf of bread is $1. Costs are as follows:
| Cost Driver | Unit Variable Cost | Level of Cost Driver |
| Units sold | $0.66 | - |
| Setups | $293 | 157 |
| Maintenance hours | $12 | 2,520 |
| Other data: | ||
| Total fixed costs (traditional) | $131,546 | |
| Total fixed costs (ABC) | 55,305 |
Required:
1. Compute the break-even point in units using conventional analysis. units
2. Compute the break-even point in units using activity-based analysis. units
3. Suppose that Busy-Bee could reduce the setup cost by $101 per setup and could reduce the number of maintenance hours needed to 1,000. How many units must be sold to break even in this case? Round your answer up to the next higher whole unit (for example, 50.3 units rounds to 51). units
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