Diego Company manufactures one product that is sold for $74 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 45,000 units and sold 40,000 units. Variable costs per unit: Manufacturing: Direct materials $ 24 Direct labor $ 18 Variable manufacturing overhead $ 3 Variable selling and administrative $ 5 Fixed costs per year Pixed manufacturing overhead $ 585,000 Pixed selling and administrative expense $ 423,000 The company sold 30,000 units in the East region and 10,000 units in the West region. It determined that $190,000 of its fixed selling and administrative expense is traceable to the West region, $140,000 is traceable to the East region, and the remaining $93,000 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. Foundational 7-1 (Algo) Required: 1. What is the unit product cost under variable costing? Unit product cost (The following information applies to the questions displayed below) Diego Company manufactures one product that is sold for $74 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 45,000 units and sold 40,000 units Variable costs per unit: Manufacturing: Direct materials $ 24 Direct labor $ 18 Variable manufacturing overhead $ 3 Variable selling and administrative 5.5 Fixed costs per year Fixed manufacturing overhead $ 585,000 Fixed selling and administrative expense $ 423,000 The company sold 30,000 units in the East region and 10,000 units in the West region. It determined that $190,000 of its fixed selling and administrative expense is traceable to the West region, $140,000 is traceable to the East region, and the remaining $93,000 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. 30 Foundational 7-3 (Algo) 3. What is the company's total contribution margin under variable costing? Answer is complete but not entirely correct. Total contribution margin $ 1.360,000 $ Diego Company manufactures one product that is sold for $74 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 45,000 units and sold 40,000 units. Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year Fixed manufacturing overhead $ 585,000 Pixed selling and administrative expense $ 423,000 The company sold 30,000 units in the East region and 10,000 units in the West region. It determined that $190,000 of its fixed selling and administrative expense is traceable to the West region, $140,000 is traceable to the East region, and the remaining $93,000 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. $ 24 $ 18 $3 $ 5 Foundational 7-4 (Algo) 4. What is the company's net operating income (loss) under variable costing? Diego Company manufactures one product that is sold for $74 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 45,000 units and sold 40,000 units Variable costs per unit: Manufacturing: Direct materials $ 24 Direct labor $ 18 Variable manufacturing overhead $ 3 Variable selling and administrative $ 5 Fixed costs per year! Fixed manufacturing overhead $ 585,000 Fixed selling and administrative expense $ 423,000 The company sold 30,000 units in the East region and 10,000 units in the West region. It determined that $190,000 of its fixed selling and administrative expense is traceable to the West region, $140,000 is traceable to the East region, and the remaining $93,000 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 Foundational 7-5 (Algo) 5. What is the company's total gross margin under absorption costing? Answer is complete but not entirely correct. Total gross margin $575.000 Diego Company manufactures one product that is sold for $74 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 45,000 units and sold 40,000 units. Variable costs per unit: Manufacturing: Direct materials 5 24 Direct labor $ 18 Variable manufacturing overhead $3 Variable selling and administrative $ 5 Fixed costs per year: Fixed manufacturing overhead $ 585,000 Fixed selling and administrative expense $ 423,000 The company sold 30,000 units in the East region and 10,000 units in the West region. It determined that $190,000 of its fixed selling and administrative expense is traceable to the West region, $140,000 is traceable to the East region, and the remaining $93,000 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 Foundational 7-6 (Algo) 6. What is the company's net operating income (loss) under absorption costing
