Question
Kindly solve the following question with all the steps by steps explanation Diego Company manufactures one product that is sold for $76 per unit. The
Kindly solve the following question with all the steps by steps explanation
Diego Company manufactures one product that is sold for $76 per unit. The following information pertains to the companys first year of operations in which it produced 47,000 units and sold 42,000 units.
Variable costs per unit: | |||
Manufacturing: | |||
Direct materials | $ | 26 | |
Direct labour | $ | 10 | |
Variable manufacturing overhead | $ | 2 | |
Variable selling and administrative | $ | 4 | |
Fixed costs per year: | |||
Fixed manufacturing overhead | $ | 987,000 | |
Fixed selling and administrative expenses | $ | 475,000 |
Required:
1. What is the unit product cost under variable costing?
Unit product cost ---------
2. What is the unit product cost under absorption costing?
Unit product cost ------
3. What is the companys total contribution margin under variable costing?
Total contribution margin -------
4. What is the companys net operating income under variable costing?
5. What is the companys total gross margin under absorption costing?
Total gross margin
6. What is the companys net operating income (loss) under absorption costing?
7. What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)?
|
8. (A) What is the companys break-even point in unit sales?
Break even points ------- units
(B). Is it above or below the actual sales volume?
multiple choice
- Below
- Above
9. What would have been the companys variable costing net operating income (loss) if it had produced and sold 42,000 units?
10. What would have been the companys absorption costing net operating income (loss) if it had produced and sold 42,000 units?
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