Question

Required information The following information applies to the questions displayed below.] Diego Company manufactures one product that is sold for $81 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 52,000 units sold 47,000 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 $936,000 $552,000 The company sold 35,000 units in the East region and 12,000 units in the West region. It determined that $260,000 of its fixed selling and administrative expense is traceable to the West region, $210,000 is traceable to the East region, and the remaining $82,000 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. 4. What is the company's net operating income (loss) under variable costing?

Answer 1

Ans Calculation of Company's hell operating income (love) under Ivanable losting & 43,807,000 Sales Variable Expenses y | Variable Coast of Goods sold $2,068,000 Variable Selling s Administratike Expl $482,000 Contribution $9,350,000 $1,457.000 margin fixed Expenses Hixed manufacturing overhead_ $936,000 fixed selling and administrative | 455P,000 $1,488.000 $(31,000) Net Operating loss.

So under variable costing the Net Operating Loss is $31,000.

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