Question

Required information The Foundational 15 [LO6-1, LO6-2, L06-3, LO6-4, LO6-5) The following information applies to the questions displayed below.) Part 11 of 11 Diego Company manufactures one product that is sold for $78 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 60,000 units and sold 57,000 units. points eBook Print References 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 $1,260,000 $ 654,000 The company sold 42,000 units in the East region and 15,000 units in the West region. It determined that $340,000 of its fixed selling and administrative expense is traceable to the West region, $290,000 is traceable to the East region, and the remaining $24,000 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. Foundational 6-13

Answer 1

Contribution margin income statement

	Total company	East	West
Sales revenue	4446000	3276000	1170000
Variable expense	2565000	1890000	675000
Contribution margin	1881000	1386000	495000
Traceable fixed expense	630000	340000	290000
Region segment margin	1251000	1046000	205000
Common Fixed expense	1284000
Net operating income	-33000