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e costs per unit: acturing: ect materials labor

e costs per unit: acturing: ect materials labor

FINANCIAL ACCOUNTING
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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A % 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. 2 W N Z Variable costs per unit: Manufacturing: Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Direct materials Direct labor Fixed manufacturing overhead Fixed selling and administrative expense 11. What would have been the company's absorption costing net operating income (loss) if it had produced and sold 42,000 units? You do not need to perform any calculations to answer this question. #S 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. S okay 3 X $ D 4 R C & IL 51 T V G 6 Y B H 7 U N J $ 644,000 $ 388,000 $ 25 $ 20 you $2 $4 8 1 M K O I 11 L 0 ? ?1
Transcribed Image Text:A % 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. 2 W N Z Variable costs per unit: Manufacturing: Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Direct materials Direct labor Fixed manufacturing overhead Fixed selling and administrative expense 11. What would have been the company's absorption costing net operating income (loss) if it had produced and sold 42,000 units? You do not need to perform any calculations to answer this question. #S 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. S okay 3 X $ D 4 R C & IL 51 T V G 6 Y B H 7 U N J $ 644,000 $ 388,000 $ 25 $ 20 you $2 $4 8 1 M K O I 11 L 0 ? ?1
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Net operating income if it had produced and sold 42,000 units (Absorption costing) :

 

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