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Foundational 6-2 Diego Company manufactures one product that is sold for $72 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 55,000 units and sold 50,000 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 expenses SSS 243 $ 10 Unit product cost $ 14 Required: What is the unit product cost under absorption costing? 5 $770,000 $607,000 The company sold 37,000 units in the East region and 13,000 units in the West region. It determined that $290,000 of its fixed selling and administrative expenses is traceable to the West region, $240,000 is traceable to the East region, and the remaining $77,000 is a common fixed cost. 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 6-2 Diego Company manufactures one product that is sold for $72 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 55,000 units and sold 50,000 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 expenses SSS 243 $ 10 Unit product cost $ 14 Required: What is the unit product cost under absorption costing? 5 $770,000 $607,000 The company sold 37,000 units in the East region and 13,000 units in the West region. It determined that $290,000 of its fixed selling and administrative expenses is traceable to the West region, $240,000 is traceable to the East region, and the remaining $77,000 is a common fixed cost. 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.

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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Foundational 6-2 Diego Company manufactures one product that is sold for $72 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 55,000 units and sold 50,000 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 expenses GA GA GA $ Unit product cost $ GA 23 14 3 5 $770,000 $ 607,000 The company sold 37,000 units in the East region and 13,000 units in the West region. It determined that $290,000 of its fixed selling and administrative expenses is traceable to the West region, $240,000 is traceable to the East region, and the remaining $77,000 is a common fixed cost. 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. Required: What is the unit product cost under absorption costing?
Transcribed Image Text:Foundational 6-2 Diego Company manufactures one product that is sold for $72 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 55,000 units and sold 50,000 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 expenses GA GA GA $ Unit product cost $ GA 23 14 3 5 $770,000 $ 607,000 The company sold 37,000 units in the East region and 13,000 units in the West region. It determined that $290,000 of its fixed selling and administrative expenses is traceable to the West region, $240,000 is traceable to the East region, and the remaining $77,000 is a common fixed cost. 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. Required: What is the unit product cost under absorption costing?
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