Diego Company manufactures one product that is sold for $72 per unit in two geographic regions-the...
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Diego Company manufactures one product that is sold for $72 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 43,000 units and sold 38,000 units. Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead $ 22 $ 14 $ 3 $ 5 $ 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. 13. Prepare a contribution format segmented income statement that includes a Total column and columns for the East and West regions. Sales Variable expenses Contribution margin Traceable fixed expenses Income Statement Total Company East West Region segment margin Common fixed expenses not traceable to regions Net operating loss 0 0 0 0 $ 0 $ 0 $ 0 Diego Company manufactures one product that is sold for $72 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 43,000 units and sold 38,000 units. Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead $ 22 $ 14 $ 3 $ 5 $ 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. 13. Prepare a contribution format segmented income statement that includes a Total column and columns for the East and West regions. Sales Variable expenses Contribution margin Traceable fixed expenses Income Statement Total Company East West Region segment margin Common fixed expenses not traceable to regions Net operating loss 0 0 0 0 $ 0 $ 0 $ 0
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1 Calculate Contribution Margin per Unit Contribution Margin per Unit Selling Price Variable Costs Contribution Margin per Unit 72 22 14 3 5 Contribut... View the full answer
Related Book For
Introduction to Managerial Accounting
ISBN: 978-0078025792
7th edition
Authors: Peter Brewer, Ray Garrison, Eric Noreen
Posted Date:
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