Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below.] Diego Company manufactures one product that is sold for $75 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 57,000 units and sold 52,000 units Variable costs per unit: Manufacturing: Direct materials 25 18 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense $627,000 $645,000 The company sold 36,000 units in the East region and 16,000 units in the West region. It determined that $310,000 of its fixed selling and administrative expense is traceable to the West region, $260,000 is traceable to the East region, and the remaining $75,000 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 column and columns for the East and West regions Income Statement Total Compan East West

Explanation / Answer

13) Prepare contribution margin incom statement :

Total company East West Sales 3900000 2700000 1200000 Variable cost 2652000 1836000 816000 Contribution margin 1248000 864000 384000 Traceable fixed cost 570000 260000 310000 Segment margin 678000 604000 74000 Common fixed expense 702000 Net operating income -24000

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