Diego Company manufactures one product that is sold for $73 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 44,000 units and sold 39,000 units. Variable coats per uniti Manufacturing Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per years Fixed manufacturing overhead Fixed selling and administrative expense 5.23 $16 $2 14 The company sold 29,000 units in the East region and 10,000 units in the West region. It determined that $180,000 of its fixed selling and administrative expense is traceable to the West region, $130,000 is traceable to the East region, and the remaining $90,000 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. Variable costing net operating income (loss) $140,000 $400,000 Foundational 7-7 (Algo) 7. What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)? Difference of Variable Costing and Absorption Costing Net Operating Income (Losses) Absorption coating net operating income (loss)
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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![Diego Company manufactures one product that is sold for $73 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 44,000 units and
sold 39,000 units.
Variable coats per uniti
Manufacturing:
Direct materials
Direct labor
Variable manufacturing overhead
Variable selling and administrative.
Fixed costs per years
Fixed manufacturing overhead
Fixed selling and administrative expense
Foundational 7-7 (Algo)
$ 23
$16
$2
$4
The company sold 29,000 units in the East region and 10,000 units in the West region. It determined that $180,000 of its
fixed selling and administrative expense is traceable to the West region, $130,000 is traceable to the East region, and the
remaining $90,000 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.
$748,000
$400,000
7. What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)?
Variable costing net operating income (loss)
Absorption costing net operating income (loss)
Difference of Variable Costing and Absorption Casting Net Operating Income (Losses)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffbe34582-b62c-4284-8862-b01b773ee480%2Fac22911b-284a-4549-9e25-815c13ea598e%2Fsu6mnt_processed.jpeg&w=3840&q=75)
![[The following information applies to the questions displayed below]
Diego Company manufactures one product that is sold for $73 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 44,000 units and
sold 39,000 units.
Variable costs per uniti
Manufacturing:
Direct naterials
Direct labor
Variable manufacturing overbead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expense
$ 23
$16
$2
3.4
$ 748,000
$ 400,000
The company sold 29,000 units in the East region and 10,000 units in the West region. It determined that $180,000 of its
fixed selling and administrative expense is traceable to the West region, $130,000 is traceable to the East region, and the
remaining $90,000 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 7-10 (Algo)
10. What would have been the company's variable costing net operating income (loss) if it had produced and sold 39,000 units? You do
not need to perform any calculations to answer this question.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffbe34582-b62c-4284-8862-b01b773ee480%2Fac22911b-284a-4549-9e25-815c13ea598e%2F5pyxb5_processed.jpeg&w=3840&q=75)
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