Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Diego Company manufactures one product that is sold for $ 7 0 per unit in two geographic regions the East and West regions. The following

Diego Company manufactures one product that is sold for $70 per unit in two geographic regionsthe East and West regions. The following information pertains to the companys first year of operations in which it produced 41,000 units and sold 36,000 units.
Variable costs per unit:
Manufacturing:
Direct materials $ 20
Direct labor $ 10
Variable manufacturing overhead $ 2
Variable selling and administrative $ 4
Fixed costs per year:
Fixed manufacturing overhead $ 984,000
Fixed selling and administrative expense $ 308,000
The company sold 26,000 units in the East region and 10,000 units in the West region. It determined that $150,000 of its fixed selling and administrative expense is traceable to the West region, $100,000 is traceable to the East region, and the remaining $58,000 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.
What is the companys total contribution margin under variable costing?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Kermit D. Larson, Paul B. W. Miller

5th Edition

0256091935, 978-0256091939

More Books

Students also viewed these Accounting questions