70.2K

Verified Solution

Link Copied!

The Foundational $15($Algo$)[$LO$4-1,$ LO$4-2,$ LO$4-3,$ LO$4-4,$ LO$4-5]$

$[$The following information applies to the questions displayed below.$]$

Diego Company manufactures one product that is sold for $$75$ 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 $57,000$ units and sold $52,000$ units.

Variable costs per unit:

Manufacturing:

Direct materials

Direct labor $ $$25$

Variable manufacturing overhead $ $18$

Variable selling and administrative $,$$$3$

Fixed costs per year:

Fixed manufacturing overhead

Fixed selling and administrative expense $$627,000$

$$645,000$

The company sold $36,000$ units in the East region and $16,000$ units in the West region. It determined that $$310,000$ of its fixed selling and administrative expense is traceable to the West region, $$260,000$ is traceable to the East region, and the remaining $$75,000$ 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 frroduct.

Foundational $4-10($Algo$)$

$10.$ What would have been the company's variable costing net operating income $($loss$)$ if it had produced and sold $52,000$ units?

Answer & Explanation Solved by verified expert

See Answer