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 and sold 47,000 units.
Variable costs per unit: Manufacturing: Direct materials $ 20
Direct labor $ 20
Variable manufacturing overhead $ 4
Variable selling and administrative $ 6
Fixed costs per year: Fixed manufacturing overhead $ 936,000
Fixed selling and administrative expenses $ 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 expenses is traceable to the West region, $210,000 is traceable to the East region, and the remaining $82,000 is a common fixed cost. 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.
PLEASE EXPLAIN IN DETAIL, HELP ME LEARN.
8. What is the company’s break-even point in unit sales?
9. If the sales volumes in the East and West regions had been reversed, what would be the company’s overall break-even point in unit sales?
10. What would have been the company’s variable costing net operating income (loss) if it had produced and sold 47,000 units?
11. What would have been the company’s absorption costing net operating income (loss) if it had produced and sold 47,000 units?
13. Prepare a contribution format segmented income statement that includes a Total column and columns for the East and West regions.
14. Diego is considering eliminating the West region because an internally generated report suggests the region’s total gross margin in the first year of operations was $32,000 less than its traceable fixed selling and administrative expenses. Diego believes that if it drops the West region, the East region's sales will grow by 5% in Year 2. Using the contribution approach for analyzing segment profitability and assuming all else remains constant in Year 2, what would be the profit impact of dropping the West region in Year 2?
15. Assume the West region invests $42,000 in a new advertising campaign in Year 2 that increases its unit sales by 20%. If all else remains constant, what would be the profit impact of pursuing the advertising campaign?

The company's break-even point in unit sales is calculated by dividing the total fixed costs by the contribution margin per unit.

In this case, the fixed costs consist of the fixed manufacturing overhead ($936,000) and the fixed selling and administrative expenses ($634,000). The variable costs per unit add up to $50 ($20 + $20 + $4 + $6), and the selling price per unit is $81. Therefore, the contribution margin per unit is $31 ($81 - $50). The break-even point can be calculated as follows: Break-even point = Total fixed costs / Contribution margin per unit = ($936,000 + $634,000) / $31 = $1,570,000 / $31 ≈ 50,645 units.

If the sales volumes in the East and West regions were reversed, the company's overall break-even point in unit sales would remain the same. The break-even point is determined by considering the total fixed costs and the contribution margin per unit, which do not depend on the sales distribution between regions.

To calculate the variable costing net operating income (loss) for producing and selling 47,000 units, we need to determine the total variable costs and deduct them from the total sales revenue. The variable costs consist of the variable manufacturing costs ($44 per unit) and the variable selling and administrative costs ($6 per unit), totaling $50 per unit. The sales revenue is calculated by multiplying the number of units sold (47,000) by the selling price per unit ($81). The variable costing net operating income can be calculated as follows: Net operating income = (Sales revenue - Total variable costs) - Total fixed costs = (47,000 units × $81) - (47,000 units × $50) - ($936,000 + $634,000).

The absorption costing net operating income (loss) takes into account both fixed and variable manufacturing costs. In this case, the fixed manufacturing overhead is considered a product cost and is absorbed into the cost of each unit produced. The absorption costing net operating income can be calculated by subtracting the total manufacturing costs (variable and fixed) from the sales revenue, and then deducting the total fixed selling and administrative expenses. The total manufacturing costs per unit are calculated as follows: $50 (variable manufacturing costs) + ($936,000 / 52,000 units). The absorption costing net operating income can be calculated using the same formula as in the variable costing approach.

To prepare a contribution format segmented income statement, we need to allocate the fixed selling and administrative expenses to the East and West regions based on their traceability. The allocated amounts are $210,000 for the East region, $260,000 for the West region, and $82,000 as a common fixed cost. The income statement should include columns for the East and West regions as well as a Total column. In each region's column, the sales revenue, variable costs, and allocated fixed costs should be listed. The contribution margin can be calculated by subtracting the variable costs from the sales revenue, and the net operating income can be calculated by deducting the allocated fixed costs from the contribution margin.

If the West region is dropped, the company's profit impact in Year 2 can be determined by analyzing the change in contribution margin. With the West region eliminated, the fixed selling and administrative expenses allocated to the region ($260,000) would be eliminated as well. Additionally, the East region's sales are expected to grow by 5%. By calculating the increase in contribution margin resulting from the sales growth and deducting the eliminated fixed expenses, the profit impact of dropping the West region in Year 2 can be determined.

In Year 2, if the West region invests $42,000 in a new advertising campaign.

To learn more about revenue

Click here brainly.com/question/29567732

#SPJ11

A self-employed psychologist treats clients in an office in his own house. What must the psychologist do with his house in order to best serve clients?

build extra rooms for client treatment
keep the house clean and private
buy snack foods for the kitchen
have a large television

what percentage of CTE learners enroll in post secondary education?​

Which of these is NOT a concern for consumers in times of inflation?
a.They cannot anticipate the cost of goods and services.
b.They lose money on their investments and savings.
c.They are at a disadvantage when paying back borrowed money.
d.They struggle when they are on a fixed income.

The markets for prostitution in Nevada and New Jersey have two important differences: 1) prostitutes in New Jersey face higher costs because of government efforts to prosecute them and 2) customers in New Jersey face higher risks of contracting diseases from prostitutes because the illegal nature of the business makes reliable information about product quality much more costly to obtain. Given these facts, which state would you expect the price of prostitution services to be higher? Why? Which state would have the higher amount of services consumed (adjusted for population differences)? Why? What are the underlying economic issues of this market?

what is the differences and similarities between rental goods services and non goods services

who wants to make a call??

what's the answer? please help, it's overdue​

Matt works part-time and is paid $6.75 per hour. Determine Matt's gross pay (hours worked x hourly rate of pay) for last week when he worked 20.25 hours. Round your answer to the hundredths place.

How do I find the cash flow coverage ratio?

Why would My future job be a flight attendant

brief explain difference between moa and aoa ?​

What would Jamie Lee's financial liability have been had she waited more than two days to report the debit/ATM card lost or stolen

All of these statements apply to effective decision makers except:

A. They take risks based on intuition and gut feelings
B. They are flexible and resourceful
C. They rely on personal ‘scripts’ that help them manage how to act and react
D. They recognize that the same solution may not apply to similar situations

The risk-reward relationship says:

What does the term 'user
experience' refer to regarding a
website?
A. the overall ease of navigation and ability to
purchase on a company's website
B. the general experience a customer has when
using a product of a business
C. the customer experience when dealing with
customer service representatives

____ reading will increase your focus and concentration, help you understand the reading, and prepare you to study.

What are three elements of negligence?
Actual Harm
Breach of duty
State of mind
Duty of care
Proximate cause
Motive

HELP PLEASE!!!
what is the outcome when a person defaults on a home loan?
A. the person goes to jail.
B. the bank will make the person work a second job.
C.the bank will take the person's car.
D.the bank will foreclose on the home.

What careers are in the Information Support and Services career pathway of the IT career cluster? (15 points for you)

Question 1 options:

graphic artists, painters, artists


broadcasters, journalists, writers


help desk specialists, PC support specialists

equity shareholders are called what ​

Por que se dice que emprender suele ser una decisión muy difícil quien la toma sabe que esta renunciando a la estabilidad que otorga un salario

When your tire blows out in the middle of a drive, you should

HELP ME PLEASEE!! ILL GIVE CROWN!!!
which of the following should credit be used for?
A. small things you want
B. large things you need and that you can repay over time.
C. money that you can never afford to repay.
D. purchasing things you want so you dont have to save.

Drag the tiles to the correct boxes to complete the pairs.
Match the different types of incomes to their sources.

List the type of banking service each consumer would be most likely to use. Explain your answer.

a. A person planning to open a fitness center
b. A musical group
c. wealthy senior citizen
d. A buyer of a van
e. A high school recycling club

An oligopoly is a market structure in which a large number of firms dominate the market. T or F

Facts about the chip category obtained from AC Nielsen are?


syndicated data.



survey data.



questionnaire data.



primary data.



experimental data.

Which of these is NOTa concern for consumers in times of inflation? a.They cannot anticipate the cost of goods and services. b.They lose money on their investments and savings. c.They are at a disadvantage when paying back borrowed money. d.They struggle when they are on a fixed income.

In what type of economy do individuals and firms determine what will be produced?
Mixed
Traditional
Market
Command

Sandia Inc. Wants to acquire a $360,000 computer-controlled printing press. If owned, the press would be depreciated on a straight-line basis over 10 years to a book salvage value of $0. The actual cash salvage value is expected to be $25,000 at the end of 10 years. If purchased, Sandia will incur annual maintenance expenses of $3,000. These expenses would not be incurred if the press is leased. If the press is purchased, Sandia could borrow the needed funds at an annual pre-tax interest rate of 10%. The lease rate would be $48,000 per year, payable at the beginning of each year. If Sandia has an after-tax cost of capital of 12% and a marginal tax rate of 40%, what is the net advantage to leasing? a.$65,543 b.$57,173 c.$37,737 d.$60,713