View Boukmarks Tools Window Help Chap 00: Hn Wrk (Part o)+ 3D comhm.tpx? 0.80481
ID: 2548651 • Letter: V
Question
View Boukmarks Tools Window Help Chap 00: Hn Wrk (Part o)+ 3D comhm.tpx? 0.8048122512257836 1521658944124 Questions 1-15 (of 15)> The following informetion applies to the questions displayed below) Diego Company manufactures one product that is sold for $78 per unlt In two geographic regions-the Esst and West regions. The following information pertalns to the company's first year of operations In which It produced 60,000 unlts and sold 57000 unlits. Varlable costs per unit: Manufacturing: Direct materials Direct labor Varlable manufacturing overhead Varlable selling and administrative 28 12 Fixed costs per year 1,260,000 Flxed manufacturing overhead Fixed selling and administrative expenses $ 654,000 The company sold 42,000 units in the East region and 15,000 units in the West region. It determined thet $340,000 of its fixed selling and administrative expenses is traceable to the West region, $290,000 s traceable to the East region, and the remaining $24,000 is a common fixed cost. The company wil 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 value:Explanation / Answer
1. Unit product cost under variable costing:
Direct Materials....................28
Direct Labour........................12
Manufacturing overhead.........2
42
Unit product cost under variable costing = Direct Materials+ Direct Labour + Manufacturing Overheads = 28+12+2 = $42 per unit
2. Unit Product Cost under Absorption Costing:
Unit Product Cost under Absorption Costing = Direct Materials+ Direct Labour + Manufacturing Overheads + Fixed
Fixed Manufacturing Overheads per unit = Total Fixed Manufacturing Overheads/No of units produced = $1,260,000/60000 = $21 per unit.
Manufacturing Overheads = 28+12+2 + 21 = $63per unit
3. Total Contribution Margin under Variable Costing.
Total Contribution Margin under Variable Costing =
Total Sales.............................................................57000*78 = 4,446,000
Less: Variable Manufacturing Cost........................57000*42 = 2,394,000
Variable Selling and Distribution Cost...........57000*3 = 171,000
Contribution Margin.....................................................................1,881,000
4. Company's net operating income under variable costing
Total Sales.............................................................57000*78 = 4,446,000
Less: Variable Manufacturing Cost........................57000*42 = 2,394,000
Variable Selling and Distribution Cost...........57000*3 = 171,000
Contribution Margin.....................................................................1,881,000
Less: Fixed Manufacturing expenses..........................................1,260,000
Less: Fixed Selling Expenses........................................................654,000
Net Operating loss.........................................................................-33,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.