Question

5.00 points Required Information 3. What is the company's total contribution margin under variable costing? Diego Company manufactures one product that is sold for $76 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 58,000 units and sold 54,000 units. Total Contribution margin References eBook & Resources Variable costs per unit: Manufacturing Direct materials Director Variable manufacturing overhead Variable selling and administrative Fixed costs per year Fored manufacturing overhead Fixed selling and administrative expenses Worksheet Leaming Objective: 05-01 Explain hov variable costing for from absorption costing and compute unit product costs under och method $ 160,000 $ 640000 Difficulty: 2 Medium Leaming Objective: 05-02 Prepare and absorption costing The company sold 40.000 units in the East region and 14,000 units in the West region it determined that $320.000 of its need seg and administrative expenses traceable to the West region. $270.000 is traceable to the East region and the remaining $50,000 is a commoned cost The company will continue to incur the Check my work

Answer 1

Solution:

Variable cost per unit = 23 + 15+ 3+ 3 = $44

Contribution margin per unit = $76 - $44 = $32 per unit

Total contribution margin = Units sold * $32 = 54000* $32 = $1,728,000