Chuck Wagon Grills, Inc., makes a single producta handmade specialty barbecue grill that it sells for $205. Data for last years operations follow: Units in beginning inventory 0 Units produced 10,300 Units sold 9,400 Units in ending inventory 900 Variable costs per unit: Direct materials $ 60 Direct labor 34 Variable manufacturing overhead 13 Variable selling and administrative 19 Total variable cost per unit $ 126 Fixed costs: Fixed manufacturing overhead $ 298,700 Fixed selling and administrative 515,000 Total fixed costs $ 813,700 Required:

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

2. Assume that the company uses absorption costing. Prepare an income statement for last year.

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

Unit product cost

Assume that the company uses absorption costing. Prepare an income statement for last year.

Chuck Wagon Grills, Inc.
Absorption Costing Income Statement
Net operating income (loss)