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 53,000 units and sold 48,000 units.   Variable costs per unit:   Manufacturing:   Direct materials $ 21 Direct labor $ 10 Variable manufacturing overhead $ 2 Variable selling and administrative $ 4 Fixed costs per year:   Fixed manufacturing overhead $ 1,060,000 Fixed selling and administrative expense $ 557,000   The company sold 36,000 units in the East region and 12,000 units in the West region. It determined that $270,000 of its fixed selling and administrative expense is traceable to the West region, $220,000 is traceable to the East region, and the remaining $67,000 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.   11. What would have been the company’s absorption costing net operating income (loss) if it had produced and sold 48,000 units? You do not need to perform any calculations to answer this question. 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 $66,000 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

Diego Company manufactures one product that is sold for $72 per unit in two geographic regions-East and West. The following information pertains to the company's first year of operations in which it produced 55,000 units and sold 50,000 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 $ 23 $ 14 $3 $5 $ 770,000 $ 607,000 The company sold 37,000 units in the East region and 13,000 units in the West region. It determined $290,000 of its fixed selling and administrative expense is traceable to the West region, $240,000 is traceable to the East region, and the remaining $77,000 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. Net operating income. Net operating loss 11.…

Diego Company manufactures one product that is sold for $72 per unit. The following information pertains to the company’s first year of operations in which it produced 55,000 units and sold 50,000 units. Variable costs per unit: Manufacturing: Direct materials $ 23 Direct labour $ 14 Variable manufacturing overhead $ 3 Variable selling and administrative $ 5 Fixed costs per year: Fixed manufacturing overhead $ 770,000 Fixed selling and administrative expenses $ 607,000 9. What would have been the company’s variable costing net operating income (loss) if it had produced and sold 50,000 units?

Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor $ 10 $4 Variable manufacturing overhead $2 Variable selling and administrative $2 Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative $ 374,000 $ 284,000 During the year, the company produced 34,000 units and sold 26,000 units. The selling price of the company's product is $44 per unit. b. Prepare an income statement for the year.