Question
[The following information applies to the questions displayed below.] Diego Company manufactures one product that is sold for $80 per unit in two geographic regionsthe
[The following information applies to the questions displayed below.]
Diego Company manufactures one product that is sold for $80 per unit in two geographic regionsthe East and West regions. The following information pertains to the company's first year of operations in which it produced 51,000 units and sold 47,000 units.
Variable costs per unit: Manufacturing: Direct materials $ 30 Direct labor $ 18 Variable manufacturing overhead $ 2 Variable selling and administrative $ 3 Fixed costs per year: Fixed manufacturing overhead $ 816,000 Fixed selling and administrative expenses $ 480,000
The company sold 34,000 units in the East region and 13,000 units in the West region. It determined that $250,000 of its fixed selling and administrative expenses is traceable to the West region, $200,000 is traceable to the East region, and the remaining $30,000 is a common fixed cost. 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.
3.What is the company's total contribution margin under variable costing?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started