### Cost Analysis of Diego Company**Company Overview:**Diego Company manufactures a single product sold for $75 per unit in two regions: East and West. The information below pertains to the company's first year of operations, in which they produced 46,000 units and sold 42,000 units.**Variable Costs Per Unit:**- Direct materials: $25- Direct labor: $20- Variable manufacturing overhead: $2- Variable selling and administrative: $4**Fixed Costs Per Year:**- Fixed manufacturing overhead: $644,000- Fixed selling and administrative expense: $388,000**Sales Distribution:**- East region: 31,000 units- West region: 11,000 units### Financial Details:The company determined that $200,000 of its fixed selling and administrative expenses are traceable to the West region, and $150,000 is traceable to the East region. The remaining $38,000 is a common fixed expense. Diego Company will continue to incur the full amount of its fixed manufacturing overhead costs as long as it produces any amount of its only product.**Breakeven Analysis:**- **Scenario Change:** If the sales volumes in the East and West regions had been reversed, there would be an impact on the overall breakeven point in unit sales. The box provided requires an input to determine the new breakeven point in units.This scenario and analysis illustrate key concepts of cost management, crucial for business decision-making, particularly in pricing and operational strategies.

Name: ### Cost Analysis of Diego Company**Company Overview:**Diego Company
Uploaded: 2024-03-20T06:33:06.000Z
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Description: ### Cost Analysis of Diego Company**Company Overview:**Diego Company manufactures a single product sold for $75 per unit in two regions: East and West. The information below pertains to the company's first year of operations, in which they produced

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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 46,000 units and sold 42,000 units. Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense $ 25 $ 20 Break even point $2 $4 The company sold 31,000 units in the East region and 11,000 units in the West region. It determined that $200,000 of its fixed selling and administrative expense is traceable to the West region, $150,000 is traceable to the East region, and the remaining $38,000 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. units $ 644,000 $ 388,000 9. If the sales volumes in the East and West regions had been reversed, what would be the company's overall break-even point in unit sales?

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 46,000 units and sold 42,000 units. Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense $ 25 $ 20 Break even point $2 $4 The company sold 31,000 units in the East region and 11,000 units in the West region. It determined that $200,000 of its fixed selling and administrative expense is traceable to the West region, $150,000 is traceable to the East region, and the remaining $38,000 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. units $ 644,000 $ 388,000 9. If the sales volumes in the East and West regions had been reversed, what would be the company's overall break-even point in unit sales?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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