Question

Required information The following information applies to the questions displayed below.] 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. 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 vu ww $1,160,000 $ 640,000 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 fixed selling and administrative expense is traceable to the West region, $270.000 is traceable to the East region, and the remaining $50,000 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. 13. Prepare a contribution format segmented income statement that includes a Total column and columns for the East and West regions. $ $ Income Statement Total Company Sales $ 4,104,000 Variable expenses 2,376,000 Contribution margin 1,728,000 Traceable fixed expenses 590,000 Region segment margin 1,138,000 Common fixed expenses not traceable to regions 1,210,000 Net operating loss $ (72,000) East 3,040,000 1,760,000 1,280,000 270,000 1,010,000 West 1.064.000 616,000 448,000 320,000 128,000 $ $

Answer 1

	Total company	East	West
Sales	4104000	3040000	1064000
Variable expenses	2376000	1760000	616000
Contribution margin	1728000	1280000	448000
Traceable fixed expenses	590000	270000	320000
Region segment margin	1138000	1010000	128000
Common fixed expenses not traceable to regions	1210000
Net Operating loss	(72000)
Workings:
Direct materials	23
Direct labor	15
Variable manufacturing overhead	3
Variable selling and administrative	3
Unit variable expense	44
	East	West
Sales	=40000*76	=14000*76
Variable expenses	=40000*44	=14000*44
Common fixed expenses not traceable to regions	=1160000+50000