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Required information

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Diego Company manufactures one product that is sold for $$81$ per unit in two geographic regions$-$East and West. The following information pertains to the company's first year of operations in which it produced $52,000$ units and sold $47,000$ units.

Variable costs per unit:

Manufacturing:

Direct materials

Direct labor

Variable manufacturing overhead

Variable selling and administrative

Fixed costs per year:

Fixed manufacturing overhead

Fixed selling and administrative expense $$936,000$

$$552,000$

The company sold $35,000$ units in the East region and $12,000$ units in the West region. It determined $$260,000$ of its fixed selling and administrative expense is traceable to the West region, $$210,000$ is traceable to the East region, and the remaining $$82,000$ 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.

$5.$ What is the company's total gross margin under absorption costing?

Total gross margin