Required information The Foundational 15 [LO6-1, LO6-2, LO6-3, LO6-4, L06-5) The following information applies to the questions displayed below) Diego Company manufactures one product that is sold for $71 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 54,000 units and sold 49,000 units. Variable costs per unit Manufacturing Direct materials Direct labor 12 Variable manufacturing overhead Variable selling and administrative Fixed costs per year Pixed manufacturing overhead Pixed sel1ing and administrative expense s 864,000 586,000 The company sold 36,000 units in the East region and 13,000 units in the West region. It determined that $280,000 of its fixed selling and administrative expense is traceable to the West region, $230,000 is traceable to the East region, and the remaining $76,000 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 regions. The following information pertains to the company's first year of operations in which it produced 54,000 units and sold 49,000 units. Variable costs per unit: Manufacturing Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year 864,000 $ 586,000 Fixed selling and administrative expense The company sold 36,000 units in the East region and 13,000 units in the West region. It determined that $280,000 of its fixed selling and administrative expense is traceable to the West region, $230,000 is traceable to the East region, and the remaining $76,000 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 Foundational 6-1 Required 1. What is the unit product cost under variable costing? Unit product cost regions. The following information pertains to the company's first year of operations in which it produced 54,000 units and sold 49,000 units. Variable costs per unit Manufacturing t Direct materialts Direct labor Variable manufacturing overhead 12 Variable selling and administrative Fixed costs per year Fixed manufacturing overhead Fixed selling and administrative expense$586,000 $ 864,000 ,000 units in the West region. It determined that $280,000 of The company sold 36,000 units in the East region and 13 its fixed selling and administrative expense is traceable to the West region $230.000 is traceable to the East region, and the remaining $76.000 is a common fixed expense. The company will manufacturing overhead costs as long as it continues to produce any amount of its only product. continue to incur the total amount of its fixed Foundational 6-2 2. What is the unit product cost under absorption costing? ine rowowing inrormation appues to tne questions aispiayea beiow Diego Company manufactures one product that is sold for $71 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 54,000 units and sold 49,000 units. Variable costs per unitr Manufacturings Direct materials Direct labor Variable manufacturing overhead Variable selling and adminiatrative Fixed manufacturing overhead Fixed selling and administrative expense 586,000 Fixed costs per year $ 864,000 The company sold 36,000 units in the East region and 13,000 units in the West region. It determined that $280,000 of its fixed selling and administrative expense is traceable to the West region, $230,000 is traceable to the East region and the remaining $76,000 is a common fixed expense. The company will continue to incur manufacturing overhead costs as long as it continues to produce any amount of its only product. the total amount of its fixed Foundational 6-3 3. What is the company's total contribution margin under variable cost ng? tine ronowing inrormation appies to tne questions aispiayea below Diego Company manufactures one product that is sold for $71 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 54,000 units and sold 49,000 units Variable costs per unitt Manufacturings Direct materials Direct labor 12 Variable nanufacturing overhead Variable selling and administrative Fixed costs per year t Fixed manufacturing overhead Fixed selling and administrative expense 586,000 864,000 The company sold 36.000 units in the East region and 13,000 units in the West region. It determined that $280,000 of its fixed selling and administrative expense is traceable to the West region, $230,000 is traceable to the East region and the remaining $76.000 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 Foundational 6-4 4. What is the company's net operating income (loss) under variable costing? tine ronowing inrormation appies to tne questions aispiayea peiow. Diego Company manufactures one product that is sold for $71 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 54.000 units and sold 49,000 units Variable costs per unit Manufacturing: 12 Variable manufacturing overhead Variable selling and administrative Fixed Pixed selling and administrative expense 586,000 Fixed costs per yeart $ 864,000 The company sold 36,000 units in the East region and 13,000 units in the West region. It determined that $280,000 of its fixed selling and administrative expense is traceable to the West region, $230,000 is traceable to the East region, and the remaining $76,000 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 Foundational 6-5 5. What is the company's total gross margin under absorption costing? tine ronowing inrormation appies to tne questions aispiayea below. Diego Company manufactures one product that is sold for $71 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 54,000 units and sold 49,000 units Variable costs per unit Di Direct labor Variable nanufacturing overhead Variable selling and administrative Fixed costs per year 864,000 Pixed manufacturing overhead Pixed sel1ing and administrative expense 586,000 The company sold 36.000 units in the East region and 13,000 units in the West region. It determined that $280,000 of its fixed selling and administrative expense is traceable to the West region, $230,000 is traceable to the East region and the remaining $76,000 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. Foundational 6-6 6. What is the company's net operating income (loss) under absorption costing? Variable costs per units Manufacturing Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per yeaE $ 864,00o Fixed manufacturing overhead Fixed selling and administrative expense 586,000 The company sold 36,000 units in the East region and 13,000 units in the West region. It determined that $280,000 of its fixed sellin and the remaining $76,000 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. g and administrative expense is traceable to the West region, $230,000 is traceable to the East region Foundational 6-7 7. What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses? 7 erence of Variable Costing and Absorption Costing Net Operating Income (Losses) Fixed selling and administrative expense $ 586,000 $280,000 df The company sold 36.000 units in the East region and 13,000 units in the West region. It determined that its fixed selling and administrative expense is traceable to the West region, $230,000 is traceable to the East region, and the remaining $76.000 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 Foundational 6-8 a. What is the company's break-even point in unit sales? b. ls it above or below the actual unit sales? O Above Below Diego Company manufactures one product that is sold for $71 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 54,000 units and sold 49.000 units. Variable costs per units Nanufacturings Direct materialts Direct labor 12 Variable manufacturing overhead Variable selling and administrative Fixed costs per year $ 864,000 Fixed manufacturing overhead Fixed selling and administrative expense 586,000 The company sold 36,000 units in the East region and 13,000 units in the West region. It determined that $280,000 of its fixed selling and administrative expense is traceable to the West region, $230,000 is traceable to the East region and the remaining $76,000 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 Foundational 6-9 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? units Variable costs per unit: Manufacturing Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year Fixed manufacturing overhead Fixed selling and administrative expense 586,000 ,000 units in the West region. It determined that $280,000 of The company sold 36,000 units in the East region and 13 its fixed selling and administrative expense is traceable to the West region, $230,000 is traceable to the East regiorn and the remaining $76,000 is a common fixed expense. The company will contin manufacturing overhead costs as long as it continues to produce any amount of its only product ue to incur the total amount of its fixed Foundational 6-10 10. What would have been the company's variable costing net operating income (loss) fit had produced and sold 49,000 not need to perform any calculations to answer this question. Variable costs per unitt Manufacturing: materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year Fixed manufacturing overhead Pixed selling and administrative expense 586,000 $ 864,000 The company sold 36,000 units in the East region and 13,000 units in the West region. It determined that $280,000 of its fixed selling and administrative expense is traceable to the West region, $ 230,000 is traceable to the East region O 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 ny amount of its onl Foundational 6-11 11. What would have been the company's absorption costing net operating income (oss) if it had produced and sold 49.000 units do not need to perform any calculations to answer this question ? You Variable costs per units Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and adninistrative Fixed costs per year: Fixed manufacturing overhead Pixed selling and administrative expense586,000 $864,000 The company sold 36,000 units in the East region and 13,000 units in the West region. It determined that $280,000 of its fixed selling and administrative expense is traceable to the West region, $230,000 is traceable to the East region, and the remaining $76,000 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. Foundational 6-12 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 2? Lower Higher its fixed selling and administrative expense is traceable to the West region, $230,000 is traceable to the East region and the remaining $76,000 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 Foundational 6-13 13. Prepare a contribution format segmented income statement that includes a Total column and columns for the East and West regions Total East West Variable costs per uniti Manufacturing: materials Direct labor 12 Variable manufacturing overhead Variable selling and administrative Fixed costs per year Fixed manufacturing overhead Fixed se1ling and administrative expense 586,000 $ 864,000 The company sold 36,000 units in the East region and 13,000 units in the West region. It determined that $280,000 of its fixed selling and administrative expense is traceable to the West region, $230,000 is traceable to the East region and the remaining $76,000 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 Foundational 6-14 14. Diego is considering eliminating the West region because an internally generated report suggests the region's total gross margin in the first year of operations was $46,000 less than its traceable fixed selling and administrative expenses. Diego believes that if it drops the west region, the East region's sales wil grow by 5% in Year 2 Using the contribution approach for analyzing segment p of tab i ty and assuming all else remains constant in Year 2, what would be the profit impact of dropping the West region in Year 2? regions. The following information pertains to the company's first year of operations in which it produced 54,000 units and sold 49,000 units. Variable costs per units Manufacturing: Direct materials Direct labor Variable nanufacturing overhead Variable selling and administrative Pixed costs per year Fixed manufacturing overhead Fixed selling and administrative expense 586,000 $ 864,000 The company sold 36,000 units in the East region and 13,000 units in the West region. It determined that $280,000 of its fixed selling and administrative expense is traceable to the West region, $230,000 is traceable to the East region, and the remaining $76,000 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. Foundational 6-15 15. Assume the west region invests $44,000 in a new advertising campaign in Year 2 that increases its unit sales by 20%, tf all else remains constant, what would be the profit impact of pursuing the advertising campaign