80.2K

Verified Solution

Link Copied!

Expected sales in cases) 56,000 11,200 Selling price per case $98 $81 Direct labor hours 33,750 5,950 Machine hours 9,450 2,600 Receiving orders 53 26 Packing orders 103 48 Material cost per case $49 $42 Direct labor cost per case $11 $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. Fixed Variable Direct labor benefits $ $202,470 Machine costs 205,500 234,230 Receiving department 231,500 Packing department 150,000 Total costs $587,000 $436,700 * 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

Answer & Explanation Solved by verified expert

See Answer