Please solve - HW 6

[The following information applies to the questions displayed below.]

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.

7. What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)? Difference of Variable Costing and Absorption Costing Net Operating Income (Losses) Variable costing net operating income (loss) S 43,000 Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing 5,000 5,000 Absorption costing net operating income (loss)