Help Sa Required Information The following information applies to the questions
ID: 2541068 • Letter: H
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Help Sa Required Information The following information applies to the questions displayed below] Diego Company manufectures one product that is sold for $73 per unit in two geographic regions-the East and West regions. The following Information pertains to the company's first year of operstions in which it produced 44,000 units and sold 39,000 units. per units reet naterials Direet lsbor Variable manufacturing overhead variable-selling.and Pixed costs per year laiatreti. 748,00 400,000 ,ized saling and administrative nae The company sold 29,000 units in the East region and 10,000 units in the West region it d fxed selling and administrative expense remaining $90,000 is a common fixed expense. The company will continue to incur the manufacturing overhead costs as long as it continues to produce any amount of its only product etermined that $180,000 of its s traceable to the West region, $130,.000 is traceable to the East region, and the total amount of its Sxed s. What is the company's break-even point in unit sales? MacBook Air 888 F. 5 6Explanation / Answer
Contribution margin income statement
Amount
Sale price per unit (A)
73
Less: Variable cost (B)
Direct materials
23
Direct labour
16
Variable manufacturing overheads
2
Variable selling and admin exp
4
Contribution margin per unit (C=A-B)
28
Total fixed costs
Amount
Fixed manufacturing overheads
$748,000
Fixed selling and admin exp
$400,000
Total fixed costs
$1,148,000
Break-even point in Units = Fixed cost/Contribution Per unit
Break-even point in Units = 1,148,000/28
41000
Break-even point in Units
41,000 units
Contribution margin income statement
Amount
Sale price per unit (A)
73
Less: Variable cost (B)
Direct materials
23
Direct labour
16
Variable manufacturing overheads
2
Variable selling and admin exp
4
Contribution margin per unit (C=A-B)
28
Total fixed costs
Amount
Fixed manufacturing overheads
$748,000
Fixed selling and admin exp
$400,000
Total fixed costs
$1,148,000
Break-even point in Units = Fixed cost/Contribution Per unit
Break-even point in Units = 1,148,000/28
41000
Break-even point in Units
41,000 units
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