Question
Chuck Wagon Grills, Inc., makes a single producta handmade specialty barbecue grill that it sells for $200. Data for last year's operations follow: Units in
Chuck Wagon Grills, Inc., makes a single producta handmade specialty barbecue grill that it sells for $200. Data for last year's operations follow:
Units in beginning inventory0Units produced9,700Units sold8,500Units in ending inventory1,200Variable costs per unit:Direct materials$80Direct labor20Variable manufacturing overhead10Variable selling and administrative30Total variable cost per unit$140Fixed costs:Fixed manufacturing overhead$170,000Fixed selling and administrative160,000Total fixed costs$330,000
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. make a contribution format income statement for last year.
3. What is the company's break-even point in terms of the number of barbecue grills sold?
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