6.

Chuck Wagon Grills, Inc., makes a single producta handmade specialty barbecue grill that it sells for $300. Data for last years operations follow:

Units in beginning inventory		0
Units produced		10,300
Units sold		8,200
Units in ending inventory		2,100
Variable costs per unit:
Direct materials	$	60
Direct labor		20
Variable manufacturing overhead		10
Variable selling and administrative		30
Total variable cost per unit	$	120
Fixed costs:
Fixed manufacturing overhead	$	160,000
Fixed selling and administrative		920,000
Total fixed costs	$	1,080,000

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.

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 3

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

Chuck Wagon Grills, Inc.
Variable Costing Income Statement

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