i just need questions 7-15 answered
The Foundational 15 - Chapter 5 Diego Company manufactures one product that is sold for $80 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 40,000 units and sold 35.000 units. 33000x0 Sales $24 Variable costs per unit: Manufacturing Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year Fixed manufacturing overhead $14 $2 $4 $800,000 $496,000 Fixed selling and administrative expense The company sold 25.000 units in the East region and 10.000 units in the West region is determined that $250,000 of its fixed selling and administrative expense is traceable to the West recio $150 000 is traceable to the East region, and the remaining 596,000 is a common fixed expense. The company will continue to incur the total amount of its foed manufacturing overhead costs as long as it continues to produce any amount of its only product Required: Sa Answer each question independently based on the original data unless instructed otherwise. You do not need to prepare a segmented income statement until question 13 24,70. 1. What is the unit product cost under variable costing/46/CD 2. What is the unit product cost under absorption costing? . What is the company's total contribution margin under variable costing? 4. What is the company's net operating income under variable costing? Test 5. What is the company's total gross margin under absorption costing? 6. What is the company's net operating income under absorption costing? 7. What is the amount of the difference between the variable costing and absorption costing net operating incomes? What is the cause of this difference? 8. What is the company's break-even point in unit sales? Is it above or below the actual unit sales? Compare the break-even point in unit sales to your answer for question 6 and comment. 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? 10. What would have been the company's variable costing net operating income if it had produced and sold 35.000 units? You do not need to perform any calculations to answer this question 11 What would have been the company's absorption costing net operating income if it had produced and sold 35,000 units? You do not need to perform any calculations to answer this question 12. If the company produces 5,000 fewer units than it sells in its second year of operations, will absorption costing net operating income be higher or lower than variable costing net operating income in Year 22 Why? No calculations are necessary. ho 15. Prepare a contribution format semented income watem East and Westen cudes total con and columns for the denne the West an d the total gross margin in the first year of operations was $50,000 less than its traceable fred selling and administrative expenses. Diego believes that it does the West region, the East region's sales win prow by in Year 2. Using the contribution approach for any profitability and assuming all else remains constant in Year 2, what would be the profit impact of dropping the West region in Year 27 15. Assume the West region invests $30.000 in a new advertising campaign in Year 2 that increases its unit sales by se remains constant, what would be the profit impact of pursuing the advertising campaign? 590 90940x5% 360 200x20% Direct materials Direct labor Variable manufacturing overhead Unit product cost under Variable Costing Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost under Absorption Costing $80 (S40) Selling price per unit Less: Units product cost under variable costing Less: Variable selling and administrarive expenses Contribution Margin per unit under variable costing (a) Total units sold (b) Contribution Margin under variable costing (a*b) 536 35.000 S1.260,000 Contribution Margin under variable costing SI 260.000 Less: Fixed Costs: Fixed manufacturing overhead (S800,000/40,000 units * 35,000) ($800,000) Fixed selling and administrative expenses ($496.000) Net Operating Income under Variable Costing (536,000) $2,800,000 Sales Revenue (35,000 units $80 per unit) Less: Cost of Goods Sold: Direct materials (35,000 $24) Direct labor (35,000 $14) Variable manufacturing overheads (35,000 * S2) Fixed manufacturing overheads (5800,000/40,000*35,000) Gross Margin under Absorption Costing (5840,000) ($490,000) (S70,000) $700.000 $700,000 $700,000 Gross Margin Less: Operating Expenses: Variable selling and administrative (35,000 54) Fixed selling and administrative Net Operating Profit (Loss) under Absorption Costing (S140,000) ($496.000) S64,000 The difference in net operating income between variable costing and absorption costing is $28,000 (S64,000 - (536,0001). The difference is due to considering the production units instead of sold units in fixed manufacturing overheads. Note: As per Chege guidelines, the first four sub parts should be answered but i have answered the first seven sub parts. Hence, please post the remaining sub parts separately. Please do not give the negative rating for not answering all the sub parts The Foundational 15 - Chapter 5 Diego Company manufactures one product that is sold for $80 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 40,000 units and sold 35.000 units. 33000x0 Sales $24 Variable costs per unit: Manufacturing Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year Fixed manufacturing overhead $14 $2 $4 $800,000 $496,000 Fixed selling and administrative expense The company sold 25.000 units in the East region and 10.000 units in the West region is determined that $250,000 of its fixed selling and administrative expense is traceable to the West recio $150 000 is traceable to the East region, and the remaining 596,000 is a common fixed expense. The company will continue to incur the total amount of its foed manufacturing overhead costs as long as it continues to produce any amount of its only product Required: Sa Answer each question independently based on the original data unless instructed otherwise. You do not need to prepare a segmented income statement until question 13 24,70. 1. What is the unit product cost under variable costing/46/CD 2. What is the unit product cost under absorption costing? . What is the company's total contribution margin under variable costing? 4. What is the company's net operating income under variable costing? Test 5. What is the company's total gross margin under absorption costing? 6. What is the company's net operating income under absorption costing? 7. What is the amount of the difference between the variable costing and absorption costing net operating incomes? What is the cause of this difference? 8. What is the company's break-even point in unit sales? Is it above or below the actual unit sales? Compare the break-even point in unit sales to your answer for question 6 and comment. 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? 10. What would have been the company's variable costing net operating income if it had produced and sold 35.000 units? You do not need to perform any calculations to answer this question 11 What would have been the company's absorption costing net operating income if it had produced and sold 35,000 units? You do not need to perform any calculations to answer this question 12. If the company produces 5,000 fewer units than it sells in its second year of operations, will absorption costing net operating income be higher or lower than variable costing net operating income in Year 22 Why? No calculations are necessary. ho 15. Prepare a contribution format semented income watem East and Westen cudes total con and columns for the denne the West an d the total gross margin in the first year of operations was $50,000 less than its traceable fred selling and administrative expenses. Diego believes that it does the West region, the East region's sales win prow by in Year 2. Using the contribution approach for any profitability and assuming all else remains constant in Year 2, what would be the profit impact of dropping the West region in Year 27 15. Assume the West region invests $30.000 in a new advertising campaign in Year 2 that increases its unit sales by se remains constant, what would be the profit impact of pursuing the advertising campaign? 590 90940x5% 360 200x20% Direct materials Direct labor Variable manufacturing overhead Unit product cost under Variable Costing Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost under Absorption Costing $80 (S40) Selling price per unit Less: Units product cost under variable costing Less: Variable selling and administrarive expenses Contribution Margin per unit under variable costing (a) Total units sold (b) Contribution Margin under variable costing (a*b) 536 35.000 S1.260,000 Contribution Margin under variable costing SI 260.000 Less: Fixed Costs: Fixed manufacturing overhead (S800,000/40,000 units * 35,000) ($800,000) Fixed selling and administrative expenses ($496.000) Net Operating Income under Variable Costing (536,000) $2,800,000 Sales Revenue (35,000 units $80 per unit) Less: Cost of Goods Sold: Direct materials (35,000 $24) Direct labor (35,000 $14) Variable manufacturing overheads (35,000 * S2) Fixed manufacturing overheads (5800,000/40,000*35,000) Gross Margin under Absorption Costing (5840,000) ($490,000) (S70,000) $700.000 $700,000 $700,000 Gross Margin Less: Operating Expenses: Variable selling and administrative (35,000 54) Fixed selling and administrative Net Operating Profit (Loss) under Absorption Costing (S140,000) ($496.000) S64,000 The difference in net operating income between variable costing and absorption costing is $28,000 (S64,000 - (536,0001). The difference is due to considering the production units instead of sold units in fixed manufacturing overheads. Note: As per Chege guidelines, the first four sub parts should be answered but i have answered the first seven sub parts. Hence, please post the remaining sub parts separately. Please do not give the negative rating for not answering all the sub parts
