ch6 p10-15

5 Required information The Foundational 15 (Algo) [LO6-1, LO6-2, L06-3, L06-4, L06-5) [The following information applies to the questions displayed below) Diego Company manufactures one product that is sold for $78 per unit in two geographic regions-the East and West regions. The following information pertains to the company's first year of operations in which it produced 60,000 units and sold 57,000 units. Variable costs per uniti Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Pixed costs per years Fixed manufacturing overhead Yixed selling and administrative expense $ $ 28 12 2 3 $1,260,000 $654,000 The company sold 42,000 units in the East region and 15,000 units in the West region. It determined that $340,000 of its fixed selling and administrative expense is traceable to the West region, $290,000 is traceable to the East region, and the remaining $24,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of its only product. 13. Prepare a contribution format segmented income statement that includes a Total column and columns for the East and West regions East West Income Statement Total Company Sales Variable expenses Contribution margin Traceable fixed expenses Region segment margin Common fixed expenses not traceable to regions Net operating income $ 0 0 0 0 $ 0 $ 0 0 Foundational 6-14 (Algo) 14. Dlego 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 $115,000 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 and assuming all else remains constant in Year 2, what would be the profit impact of dropping the West region in Year 2? Profit will Foundational 6-15 (Algo) 15. Assume the West region invests $50,000 in a new advertising campaign in Year 2 that increases its unit sales by 20%. If all else remains constant, what would be the profit impact of pursuing the advertising campaign? Profit will Foundational 6-11 (Algo) 11. What would have been the company's absorption costing net operating income (loss) if it had produced and sold 57,000 units? 10. What would have been the company's variable costing net operating income (loss) if it had produced and sold 57,000 units