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

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

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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