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3) Chuck Wagon Grills, Inc., makes a single producta handmade specialty barbecue grill that it sells for $210. Data for last years operations follow: Units

3) Chuck Wagon Grills, Inc., makes a single producta handmade specialty barbecue grill that it sells for $210. Data for last years operations follow:

Units in beginning inventory

0

Units produced

20,000

Units sold

19,000

Units in ending inventory

1,000

Variable costs per unit:

Direct materials

50

Direct labor

80

Variable manufacturing overhead

20

Variable selling and administrative

10

Total variable cost per unit

160

Fixed costs:

Fixed manufacturing overhead

$700,000

Fixed selling and administrative

285,000

Total fixed costs

$985,000

Required:

1. Assume that the company uses variable costing. Compute the unit product cost for one barbecue grill.

2. Assume that the company uses variable costing. Prepare a contribution format income statement for last year.

3. What is the companys break-even point in terms of the number of barbecue grills sold?

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