Diego Company manufactures one product that is sold for $70 per unit in two geographic regions-East and West. The following information pertains to the company's first year of operations in which it produced 53,000 units and sold 48,000 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 $21 $ 10 $2 $4 $ 1,060,000 $ 557,000 The company sold 36,000 units in the East region and 12.000 units in the West region. It determined that $270,000 of its fixed selling and administrative expense is traceable to the West region, $220,000 is traceable to the East region, and the remaining $67,000 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. Answer is complete but not entirely correct. Net operating income $ 60,000 6. What is the company's net operating income (loss) under absorption costing? Diego Company manufactures one product that is sold for $70 per unit in two geographic regions-East and West. The following information pertains to the company's first year of operations in which it produced 53,000 units and sold 48.000 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 $21 $10. $2 $4 $ 1,060,000 $ 557,000 The company sold 36,000 units in the East region and 12.000 units in the West region. It determined that $270,000 of its fixed selling and administrative expense is traceable to the West region, $220,000 is traceable to the East region, and the remaining $67,000 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. 7. What is the difference between the variable costing and absorption costing net operating incomes (losses)? Variable costing net operating income (loss) Answer is not complete. Difference of Variable Costing and Absorption Costing Net Operating Income (Losses) Add Fixed manufacturing overhead cost deferred in inventory under absorption costing Absorption costing net operating income (loss) S 105,000 43,000 Diego Company manufactures one product that is sold for $70 per unit in two geographic regions-East and West. The following information pertains to the company's first year of operations in which it produced 53,000 units and sold 48,000 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 What is the company's break-even point in unit sales? The company sold 36,000 units in the East region and 12,000 units in the West region. It determined that $270,000 of its fixed selling and administrative expense is traceable to the West region, $220,000 is traceable to the East region, and the remaining $67,000 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. Break even point $21 $ 10 $2 $4 units $1,060,000 $ 557,000 15 1 nces Diego Company manufactures one product that is sold for $70 per unit in two geographic regions-East and West. The following information pertains to the company's first year of operations in which it produced 53,000 units and sold 48,000 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 $21 $ 10 Break even point $2 $4 The company sold 36,000 units in the East region and 12.000 units in the West region. It determined that $270,000 of its fixed selling and administrative expense is traceable to the West region, $220,000 is traceable to the East region, and the remaining $67,000 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. units $ 1,060,000 $ 557,000 9. If the sales volumes in the East and West regions had been reversed, what would be the company's overall break-even point in unit sales? Diego Company manufactures one product that is sold for $70 per unit in two geographic regions-East and West. The following information pertains to the company's first year of operations in which it produced 53,000 units and sold 48,000 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 $21 $10. $2 $4 $ 1,060,000 $ 557,000 The company sold 36,000 units in the East region and 12,000 units in the West region. It determined that $270,000 of its fixed selling and administrative expense is traceable to the West region, $220,000 is traceable to the East region, and the remaining $67,000 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 would have been the company's variable costing net operating income (loss) if it had produced and sold 48,000 units? 5 es Diego Company manufactures one product that is sold for $70 per unit in two geographic regions-East and West. The following information pertains to the company's first year of operations in which it produced 53,000 units and sold 48,000 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 $21 $10 $2 $4 $1,060,000 $ 557,000 The company sold 36,000 units in the East region and 12,000 units in the West region. It determined that $270,000 of its fixed selling and administrative expense is traceable to the West region, $220,000 is traceable to the East region, and the remaining $67,000 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. 11. What would have been the company's absorption costing net operating income (loss) if it had produced and sold 48,000 units? Diego Company manufactures one product that is sold for $70 per unit in two geographic regions-East and West. The following information pertains to the company's first year of operations in which it produced 53,000 units and sold 48,000 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 $ 21 $ 10 $2 $4 The company sold 36,000 units in the East region and 12,000 units in the West region. It determined that $270,000 of its fixed selling and administrative expense is traceable to the West region, $220,000 is traceable to the East region, and the remaining $67,000 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. Income Statement $ 1,060,000 $ 557,000 13. Prepare a contribution format segmented income statement that includes a Total column and columns for the East and West regions. Total Company East West variable selling and administrative. Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense The company sold 36,000 units in the East region and 12,000 units in the West region. It determined that $270,000 of its fixed selling and administrative expense is traceable to the West region, $220,000 is traceable to the East region, and the remaining $67,000 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. $1,060,000 $ 557,000 3. Prepare a contribution format segmented income statement that includes a Total column and columns for the East and West regions. Income Statement Total Company East West Diego Company manufactures one product that is sold for $70 per unit in two geographic regions-East and West. The following information pertains to the company's first year of operations in which it produced 53,000 units and sold 48,000 units. Variable costs per unit: Manufacturing: Direct materials. Direct labor Variable manufacturing overhead i Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense Profit will $21 $ 10 The company sold 36,000 units in the East region and 12.000 units in the West region. It determined that $270,000 of its fixed selling and administrative expense is traceable to the West region, $220,000 is traceable to the East region, and the remaining $67,000 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. decrease $2 $4 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 $66,000 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? by $ 1,060,000 $ 557,000 Diego Company manufactures one product that is sold for $70 per unit in two geographic regions-East and West. The following information pertains to the company's first year of operations in which it produced 53,000 units and sold 48,000 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 $ 21 $10 $2 $4 The company sold 36,000 units in the East region and 12.000 units in the West region. It determined that $270,000 of its fixed selling and administrative expense is traceable to the West region, $220,000 is traceable to the East region, and the remaining $67,000 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. Profit will $ 1,060,000 $ 557,000 15. Assume the West region invests $43,000 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? by