2. Sent APP -nt A Seved sold 42,000 units Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year! Fixed manufacturing overhead Fixed selling and administrative expense 26 10 S2 $ 4 $ 987,000 $475,000 The company sold 32,000 units in the East region and 10,000 units in the West region. It determined that $210,000 of its fixed selling and administrative expense is traceable to the West region, S160,000 is traceable to the East region, and the remaining $105,000 is a common fixed expense. The company will continue to incur the total amount of its foced manufacturing overhead costs as long as it continues to produce any amount of its only product 14. Diego is considering eliminating the West region because an internally generated report suggests the region's total gross margin in the first year of operations was $40,000 less than its traceable fixed selling and administrative expenses. Diego believes that if it drops the West region, the East region's sales will grow by 5% in Year 2 Using the contribution approach for analyzing segment profitability ond assuming all else remains constant in Year 2, what would be the profit impact of dropping the West region in Year 22 Prott w PNG Untitled Design (1) PNG - Untitled Design PNG IMG_017 (UPG IMG_3185.jpg to search E o & 90 5 O 00 0) 7 4 R T y 2. Sent APP -nt A Seved sold 42,000 units Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year! Fixed manufacturing overhead Fixed selling and administrative expense 26 10 S2 $ 4 $ 987,000 $475,000 The company sold 32,000 units in the East region and 10,000 units in the West region. It determined that $210,000 of its fixed selling and administrative expense is traceable to the West region, S160,000 is traceable to the East region, and the remaining $105,000 is a common fixed expense. The company will continue to incur the total amount of its foced manufacturing overhead costs as long as it continues to produce any amount of its only product 14. Diego is considering eliminating the West region because an internally generated report suggests the region's total gross margin in the first year of operations was $40,000 less than its traceable fixed selling and administrative expenses. Diego believes that if it drops the West region, the East region's sales will grow by 5% in Year 2 Using the contribution approach for analyzing segment profitability ond assuming all else remains constant in Year 2, what would be the profit impact of dropping the West region in Year 22 Prott w PNG Untitled Design (1) PNG - Untitled Design PNG IMG_017 (UPG IMG_3185.jpg to search E o & 90 5 O 00 0) 7 4 R T y