Required information Skip to question [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 57,000 units and sold 52,000 units. Variable costs per unit: Manufacturing: Direct materials $ 25 Direct labor $ 18 Variable manufacturing overhead $ 3 Variable selling and administrative $ 5 Fixed costs per year: Fixed manufacturing overhead $627,000 Fixed selling and administrative expense $ 645,000 The company sold 36,000 units in the East region and 16,000 units in the West region. It determined that $310,000 of its fixed selling and administrative expense is traceable to the West region, $ 260,000 is traceable to the East region, and the remaining $75,000 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. 7. What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)?
Required information Skip to question [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 57,000 units and sold 52,000 units. Variable costs per unit: Manufacturing: Direct materials $ 25 Direct labor $ 18 Variable manufacturing overhead $ 3 Variable selling and administrative $ 5 Fixed costs per year: Fixed manufacturing overhead $627,000 Fixed selling and administrative expense $ 645,000 The company sold 36,000 units in the East region and 16,000 units in the West region. It determined that $310,000 of its fixed selling and administrative expense is traceable to the West region, $ 260,000 is traceable to the East region, and the remaining $75,000 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. 7. What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4BE: Activity-based costing: selling and administrative expenses Jungle Junior Company manufactures and...
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![Required information Skip to question [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 57,000 units and sold
52,000 units. Variable costs per unit: Manufacturing: Direct materials $25 Direct labor $ 18 Variable manufacturing
overhead $ 3 Variable selling and administrative $ 5 Fixed costs per year: Fixed manufacturing overhead $627,000 Fixed
selling and administrative expense $ 645,000 The company sold 36,000 units in the East region and 16,000 units in the
West region. It determined that $310,000 of its fixed selling and administrative expense is traceable to the West region, $
260,000 is traceable to the East region, and the remaining $75,000 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. 7. What is the amount of the difference between the variable costing and absorption costing
net operating incomes (losses)?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F86145484-1152-4fa7-8148-12a6eaa6d629%2F23ec8466-b833-49c3-b3bd-366f2e43d0d5%2F20krocj_processed.png&w=3840&q=75)
Transcribed Image Text:Required information Skip to question [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 57,000 units and sold
52,000 units. Variable costs per unit: Manufacturing: Direct materials $25 Direct labor $ 18 Variable manufacturing
overhead $ 3 Variable selling and administrative $ 5 Fixed costs per year: Fixed manufacturing overhead $627,000 Fixed
selling and administrative expense $ 645,000 The company sold 36,000 units in the East region and 16,000 units in the
West region. It determined that $310,000 of its fixed selling and administrative expense is traceable to the West region, $
260,000 is traceable to the East region, and the remaining $75,000 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. 7. What is the amount of the difference between the variable costing and absorption costing
net operating incomes (losses)?
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