The following information applies to the questions displayed belowJ Diego Compen
ID: 2540782 • Letter: T
Question
The following information applies to the questions displayed belowJ Diego Compeny manufactures one product that is sold for $80 per unit in two geographic regions-the Eost 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 units Variable costs per unit: Manufacturing: $ 24 S 14 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year 800,000 Fixed manufecturing overhead 496,000 Fixed selling and administrative expenses The company sold 25,000 units in the East region and 10,000 units in the West region. It determined that $250,000 of its fixed selling and administrative expenses is treceable to the West region, $150,000 is treceable to the East region, and the remaining $96,000 is a common fixed cost. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long es it continues to produce any amount of its only product References O Type here to search FT F2 F3 F5 F6 F7 F9 F10 4. 5 6 a W ER T YExplanation / Answer
1. Unit product cost under variable costing: $40
2. Unit product cost under absorption costing: $60
Working:
*Fixed manufacturing overhead per unit = $800000/40000 units produced = $20 per unit
3. Total Contribution margin: $1260000
4. Net operating loss: $36000
Working:
Per Chegg guidelines, 4 sub-parts have been answered.
Variable Costing Absorption Costing Direct material 24 24 Direct labor 14 14 Variable manufacturing overhead 2 2 Fixed manufacturing overhead* 20 Unit product cost $ 40 60Related Questions
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