The Foundational 15 [L06-1, LO6-2, LO6-3, LO6-4, LO6-5 The following information

Question

The Foundational 15 [L06-1, LO6-2, LO6-3, LO6-4, LO6-5 The following information applies to the questions displayed below Diego Company manufactures one product that is sold for $81 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 52,000 units and sold 47,000 units. Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead 20 20 Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense$552,000 $936,000 The company sold 35,000 units in the East region and 12,000 units in the West region. It determined that $260,000 of its fixed selling and administrative expense is traceable to the West region, $210,000 is traceable to the East region, and the remaining $82,000 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. Foundational 6-13 13. Prepare a contribution format segmented income statement that includes a Total column and columns for the East and West regions Income Statement Total East West

Explanation / Answer

13.) COntribution Margin Income Statement

15)

We see that as a result of the increase in advertising expense resulting in an increase in sales by 20% in the west region, the total profits have increased considerably.

Total Company East West Sales $38,07,000 $28,35,000 $9,72,000 Less: variable production expenses Direct material $9,40,000 $7,00,000 $2,40,000 Direct labor $9,40,000 $7,00,000 $2,40,000 variable manufacturing overhead $1,88,000 $1,40,000 $48,000 Gross contribution margin $17,39,000 $12,95,000 $4,44,000 Less: variable selling exp $2,82,000 $2,10,000 $72,000 Contribution margin $14,57,000 $10,85,000 $3,72,000 Less: fixed expenses Fixed manufacturing overhead $9,36,000 selling and admin expenses $5,52,000 $2,10,000 $2,60,000 Net operating income -$31,000 $8,75,000 $1,12,000

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.