Check my Required information The following information applies to the questions
ID: 2338274 • Letter: C
Question
Check my Required information The following information applies to the questions displayed below] Diego Company manufactures one product that is sold for $70 per unit in two geographic regions the East and West sold 36,000 units. 15 The following information pertains to the company's first year of operations in which it produced 41,000 units and Variable costs per unit: Manufacturing: Direct materials 26 1e Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense 984,88e 308,8ee 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 4. What is the company's net operating income (loss) under variable costing?Explanation / Answer
Solution:
4. The company's net operating income under variable costing:
First we need to find the product cost per unit:
Diego company's
variable costing
$ Direct materials 20 Direct labour 10 Variable manufacturing overhead 2 Product cost per unit $32 NOTE: Variable selling and admininistrative cost is a period cost and not a product cost