I\'ve posted the \'information\' and my work. If any of you can go over this and

Question

I've posted the 'information' and my work. If any of you can go over this and help me out. It's due soon and we only get one shot. If i got a wrong answer, can you lead me in the right direction? My work is posted below along with my answers.

Diego Company manufactures one product that is sold for $80 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 40,000 units and sold 35,000.

Variable Cost Per Unit:

Manufacturing:

Direct Materials $24

Direct Labor $14

Variable Manufacturing Overhead $2

Variable Selling/Admin $4

Fixed Cost Per Year:

Fixed Manufacturing Overhead $800,000

Fixed Selling and administrative $496,000

East Region:

Units Sold: 25,000 Units

Traceable Fixed selling and administrative expenses $96,000

West Region:

Units Sold: 10,000 Units

Traceable Fixed selling and administrative expenses $250,000

Common Fixed Cost: $96,0000

1: Variable Unit Product Cost:

Direct Materials: 24

Direct Labor: 12

Variable M.O: 2

Variable Unit Product Cost: $40

2. Absorption Unit Product Cost:

Variable Unit Product Cost + (800,000/40,000)

$40 + $20 = $60

Absorption Unit Product Cost: $60

3. Total Contribution Margin (Variable)

Selling Price $80

Var Product Cost Per Unit $40

Var Selling/Admin Expen $ 4 $44

Contribution Margin $36

$36 (x) 35,000 Units sold = $1,260,000

4. Net Operating Income (Variable)

Total Contribution Income: $1,260,000

Total Fixed Expenses: $1,296,000

Net Operating Income ($36,000)

5. Absorption Total Gross Margin

$80 Unit

(-) $60 Absorption Unit Production Cost

$20 Gross/unit

(x) 35,000 Units Sold

$700,000 Total Gross Margin

5 ? another way to solve Total Gross Margin

$2,800,000 Sales/Revenue

$2,100,000 COGS ($60 Absorption Unit Product Cost x 35,000 Units sold)

$700,000 Total Gross Margin

6. Net Operation Income (Absorption)

Sales $2,800,000

COGS $2,100,000

Gross $700,000

Selling/Admin Expenses $636,000 (4x35,000 = $140,000 + $496,000)

Net Operating Income $64,000

7. Negatives should be indicted by minus sign

Variable Costing Net Operating Income (Loss) $ -36,000

(add/subtract) (Manufacturing Overhead Released/Deffered) ___________

Absorption Costing Net Operating income (loss) $ ___________

8. What is the company?s break-even point in unit sales?

Break even point ___________ units

Is it above the actual sales volume?

____________

$1,296,000/36 = 36,000 Break Even Point

1,000 Units ABOVE actual sales volume

9. If the sales volume in the East and West regions had been reversed, what would be the company?s overall break-even point in unit sales?

Break even point _________ units

10: What would have been the company?s variable costing net operating income (loss) if it had producted and sold 35,000 units? (input as positive value)

Explanation / Answer

All answers you have are correct! I have the same homework assignment due I use Connect Mcgraw, they allow you to check the work, so your ok.

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