Diego Company manufactures one product that is sold for $70O per unit in two geo

Question

Diego Company manufactures one product that is sold for $70O 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 41000 units and sold 36.000 units. oosts per Kanufacturingi variable a variable seiling and adminiatrative Pized coate per ygarn dinstrase Fixed anufacturing overhend Fixed selling and·dministrative expense 984,00 308,000 The company sold 26,000 units in the East region and 10,000 units in the West region, It determined that $150,000 of its fixed selling and administrative expense is traceable to the West region, $100,000 is traceable to the East region, and the remaining $58,000 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 coumn and columns for the East and West weren regions.

Explanation / Answer

Total East West Sales revenue 2520000 1820000 700000 Variable expenses 1296000 936000 360000 Contribution margin 1224000 884000 340000 Traceable fixed expenses 250000 100000 150000 Segment margin 974000 784000 190000 Common fixed expenses 1042000 Net operating income(loss) -68000

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