! Required information [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 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 $ 23 $ 16 $ 2 $ 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. 6. What is the company's net operating income (loss) under absorption costing?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 5EA: Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost...
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Required information
[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 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
$ 23
$ 16
$ 2
$ 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.
6. What is the company's net operating income (loss) under absorption costing?
Transcribed Image Text:! Required information [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 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 $ 23 $ 16 $ 2 $ 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. 6. What is the company's net operating income (loss) under absorption costing?
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