Diego Company manufactures one product that is sold for $72 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 43,000 units and sold 38,000 units.

Variable costs per unit:
Manufacturing:
Direct materials	$ 22
Direct labor	$ 14
Variable manufacturing overhead	$ 3
Variable selling and administrative	$ 5
Fixed costs per year:
Fixed manufacturing overhead	$ 774,000
Fixed selling and administrative expense	$ 346,000

The company sold 28,000 units in the East region and 10,000 units in the West region. It determined that $170,000 of its fixed selling and administrative expense is traceable to the West region, $120,000 is traceable to the East region, and the remaining $56,000 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) What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)

2) What is the companys break-even point in unit sales?

3) If the sales volumes in the East and West regions had been reversed, what would be the companys overall break-even point in unit sales?

4) 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
Salesselected answer correct	$2,736,000selected answer correct	$2,016,000selected answer correct	$720,000selected answer correct
Variable expensesselected answer correct	1,672,000selected answer correct	1,232,000selected answer correct	440,000selected answer correct
Contribution marginselected answer correct	1,064,000	784,000	280,000
Traceable fixed expensesselected answer correct	290,000selected answer correct	?	?
Region segment marginselected answer correct	774,000	$614,000	$160,000
Common fixed expenses not traceable to regionsselected answer correct	830,000selected answer correct
Net operating lossselected answer correct	$(56,000)

*Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.