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 48,000 units? You do not need to perform any calculations to answer this question
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 |
$ 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
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 48,000 units? You do not need to perform any calculations to answer this question.
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