Question

Required information The following information applies to the questions displayed below.) Diego Company manufactures one product that is sold for $70 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 41,000 units and sold 36,000 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 $984,080 $ 308, oee The company sold 26.000 units in the East region and 10,000 units in the West region. It determined that $150,000 of its fixed selling and administrative expense is traceable to the West region, $100.000 is traceable to the East region, and the remaining $58,000 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 East West 13 14 15 of 15 Next > e W 9

Answer 1

Diego Company Contribution margin format segmented income statement Total East West Company Sales $2,520,000 $1,820,000 $700,000 (East = 26,000 x $70; West = 10,000 x $70] Variable costs and expenses $1,296,000 $936,000 $360,000 (East = 26,000 x ($20+$10+$2+$4); West = 10,000 x ($20+$10+$2+$4)] Contribution margin $1,224,000 $884,000 $340,000 Traceable fixed selling & admin expenses $250,000 $100,000 $150,000 (Given] Product line segment margin $974,000 $784,000 $190,000 (Contribution margin - Traceable fixed exp.] Common fixed costs & expenses $1,042,000 [$58,000 + $984,000] Net operating income (loss) $68,000