of 15 ! Required information [The following information applies to the questions displayed below.] 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 $2 $4 $ 644,000 $ 388,000 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. Total contribution margin 3. What is the company's total contribution margin under variable costing?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Wed Oct 12
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Start Page
ezto.mheducation.com A
22 my.post.edu...
Variable costs per unit:
Manufacturing:
3 Unit 4-...
Required information
[The following information applies to the questions displayed below.]
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.
Direct materials
Direct labor
Variable manufacturing overhead
Variable selling and administrative
Total contribution margin
C Crumbl Coo...
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expense
Okay
72%
+
Check my work
Roles in a Te...
$ 25
$20
$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.
You
$ 644,000
$ 388,000
3. What is the company's total contribution margin under variable costing?
088
Transcribed Image Text:Wed Oct 12 < G the break of 15 AA ! Start Page ezto.mheducation.com A 22 my.post.edu... Variable costs per unit: Manufacturing: 3 Unit 4-... Required information [The following information applies to the questions displayed below.] 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. Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total contribution margin C Crumbl Coo... Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense Okay 72% + Check my work Roles in a Te... $ 25 $20 $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. You $ 644,000 $ 388,000 3. What is the company's total contribution margin under variable costing? 088
Expert Solution
Step 1

Variable Cost :— It is the cost that changes with change in units. It is constant in per unit for all flexible units.

 

Fixed Cost :— It is the cost that does not changes with change in units. It is constant in total for all flexible units. 

 

Contribution Margin :— It is the difference between sales revenue and variable cost. 

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