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Please assist in answering the following questions. Thank you so much in advance Diego Company manufactures one product that is sold for $76 per unit
Please assist in answering the following questions. Thank you so much in advance
Required information The following information apples to the questions displayed below/ Diego Company manufactures one product that is sold for $76 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 47,000 units and sold 42,000 units. Variable costs per unit: Manufacturing: S26 Direct materials Direct labor Variable manufacturing overhead SL0 Variable selling and administrative $4 $987,ee0 $475,ee0 Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense The company sold 32,000 units in the East region and 10,000 units in the West region. It determined that $210,000 of its fixed selling and administrative expense is traceable to the West region, $160,000 is traceable to the East region, and the remaining $105,000 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 Diego Company manufactures one product that is sold for $76 per unit into geographic regions the east and west regions. The following information pertains to the companies first year of operations in which they produce 47,000 units and sold 42,000 units.
The company sold 32,000 units in the East region and 10,000 units in the West region. It dertermined that $210,000 of its fixed selling and administrative expense is traceable to the West region, $160,000 is traceable to the east region, and the remaining 105 thousand is a common fix expense. The company will continue to cure the total amount of its fixed manufacturing overhead cost as long as it continues to produce any amount of its only product.
7. What is the amount of the variable costing and absorption costing net operating incomes (losses)?
8. What is the companys break-even point in unit sales?
9. If the sales volume in the east and west regions had been reversed, what would be the companys overall break-even point in unit sales?
10. What would have been the companys variable costing net operating income (loss) if it had produced and sold 42,000 units?
11. What wouldve been the companys absorption costing net operating income (loss) if I had produce 42,000 units?
12. (Answered)
13. (Will ask separate)
14. Diego is considering eliminating the west region because and internally generated report suggests the regions total gross margin in the first year of operations was $40,000 less than its traceable fixed selling in administrative expenses. Diego believes that if it drops the west region, the east region cells will grow by 5% in year 2. Using the contribution approach for analyzing segment profitability in assuming all else remains constant in year 2, what would be the profit impact of dropping the West region in Year 2? Answer in this format: profit will (increase or decrease) by ( ).
15. Assume the west region invest $37,000 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 pursuing the advertising campaign? Answer in this format: profit will (increase or decrease) by ( ).
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