The following information applies to the questions displayed below Diego Company manufactures one product that is sold for $78 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 49,000 units and sold 44,000 units Variable costs per unit Manufacturing Direct materials $ 28 Direct labor $ 14 Variable manufacturing overhead $ 4 Variable selling and administrative $ 6 Fixed costs per year Fixed manufacturing overhead $ 686,000 Fixed selling and administrative expenses $ 510,000 The company sold 32,000 units in the East region and 12,000 units in the West region It determined that $230,000 of its fixed selling and administrative expenses is traceable to the West region, $180,000 is traceable to the East region, and the remaining $100,000 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 1 value 0 66 points Required information Required 1 What is the unit product cost under variable costing References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work 2 value 0 66 points Required information 2 What is the unit product cost under absorption costing References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work 3 value 0 66 points Required information 3 What is the companys total contribution margin under variable costing References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work 4 value 0 66 points Required information 4 What is the companys net operating income (loss) under variable costing References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work 5 value 0 66 points Required information 5 What is the companys total gross margin under absorption costing References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work 6 value 0 66 points Required information 6 What is the companys net operating income (loss) under absorption costing References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work 7 value 0 66 points Required information 7 What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses) References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work 8 value 0 66 points Required information 1 What is the companys break even point in unit sales 2 Is it above or below the actual sales volume Below Above References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work 9 value 0 66 points Required information 9 If the sales volumes in the East and West regions had been reversed, what would be the companys overall break even point in unit sales References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work 10 value 0 66 points Required information 10 What would have been the companys variable costing net operating income (loss) if it had produced and sold 44,000 units References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work 11 value 0 66 points Required information 11 What would have been the companys absorption costing net operating income (loss) if it had produced and sold 44,000 units rev 07 07 2017 QC CS 92071 References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work 12 value 0 66 points Required information 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 Higher Lower References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work 13 value 0 66 points Required information 13 Prepare a contribution format segmented income statement that includes a Total column and columns for the East and West regions References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work 14 value 0 66 points Required information 14 Diego is considering eliminating the West region because an internally generated report suggests the regions total gross margin in the first year of operations was $14,000 less than its traceable fixed selling and administrative expenses Diego believes that if it drops the West region, the East region's sales will grow by 5 in Year 2 Using the contribution approach for analyzing segment profitability and assuming all else remains constant in Year 2, what would be the profit impact of dropping the West region in Year 2 References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work 15 value 0 76 points Required information 15 Assume the West region invests $39,000 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 of pursuing the advertising campaign References eBook Resources Worksheet Learning Objective 06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective 06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ Difficulty 2 Medium Learning Objective 06 02 Prepare income statements using both variable and absorption costing Learning Objective 06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions Check my work

Question

The following information applies to the questions displayed below   Diego Company manufactures one product that is sold for $78 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 49,000 units and sold 44,000 units  Variable costs per unit  Manufacturing  Direct materials $ 28 Direct labor $ 14 Variable manufacturing overhead $ 4 Variable selling and administrative $ 6 Fixed costs per year  Fixed manufacturing overhead $ 686,000 Fixed selling and administrative expenses $ 510,000 The company sold 32,000 units in the East region and 12,000 units in the West region  It determined that $230,000 of its fixed selling and administrative expenses is traceable to the West region, $180,000 is traceable to the East region, and the remaining $100,000 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  1  value  0 66 points Required information Required  1  What is the unit product cost under variable costing  References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work 2  value  0 66 points Required information 2  What is the unit product cost under absorption costing  References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work 3  value  0 66 points Required information 3  What is the companys total contribution margin under variable costing  References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work 4  value  0 66 points Required information 4  What is the companys net operating income (loss) under variable costing  References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work 5  value  0 66 points Required information 5  What is the companys total gross margin under absorption costing  References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work 6  value  0 66 points Required information 6  What is the companys net operating income (loss) under absorption costing  References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work 7  value  0 66 points Required information 7  What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)  References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work 8  value  0 66 points Required information 1  What is the companys break even point in unit sales  2  Is it above or below the actual sales volume  Below Above References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work 9  value  0 66 points Required information 9  If the sales volumes in the East and West regions had been reversed, what would be the companys overall break even point in unit sales  References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work 10  value  0 66 points Required information 10  What would have been the companys variable costing net operating income (loss) if it had produced and sold 44,000 units  References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work 11  value  0 66 points Required information 11  What would have been the companys absorption costing net operating income (loss) if it had produced and sold 44,000 units  rev  07 07 2017 QC CS 92071 References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work 12  value  0 66 points Required information 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  Higher Lower References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work 13  value  0 66 points Required information 13  Prepare a contribution format segmented income statement that includes a Total column and columns for the East and West regions  References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work 14  value  0 66 points Required information 14  Diego is considering eliminating the West region because an internally generated report suggests the regions total gross margin in the first year of operations was $14,000 less than its traceable fixed selling and administrative expenses  Diego believes that if it drops the West region, the East region's sales will grow by 5  in Year 2  Using the contribution approach for analyzing segment profitability and assuming all else remains constant in Year 2, what would be the profit impact of dropping the West region in Year 2  References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work 15  value  0 76 points Required information 15  Assume the West region invests $39,000 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 of pursuing the advertising campaign  References eBook   Resources Worksheet Learning Objective  06 01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Learning Objective  06 03 Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ  Difficulty  2 Medium Learning Objective  06 02 Prepare income statements using both variable and absorption costing Learning Objective  06 04 Prepare a segmented income statement that differentiates traceable fixed costs from common fixed costs and use it to make decisions  Check my work

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[The following information applies to the questions displayed below.] Diego Company manufactures one product that is sold for $78 per unit in two geographic regionsthe

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Variable costs per unit:
Manufacturing:
Direct materials	$	28
Direct labor	$	14
Variable manufacturing overhead	$	4
Variable selling and administrative	$	6
Fixed costs per year:
Fixed manufacturing overhead	$	686,000
Fixed selling and administrative expenses	$	510,000

Required:
1.	What is the unit product cost under variable costing?