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Chuck Wagon Grills, Inc., makes a single product-a handmade specialty barbecue grill that it sells for $300. Data for last year's operations follow: Units in
Chuck Wagon Grills, Inc., makes a single product-a handmade specialty barbecue grill that it sells for $300. Data for last year's operations follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials 0 10,100 8,100 2,000 60 Direct labor 20 10 30 Variable manufacturing overhead Variable selling and administrative Total variable cost per unit $120 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 210,000 1,230,000 Total fixed costs $1,440,000 Required: 1. Assume that the company uses variable costing. Compute the unit product cost for one barbecue grill. Unit product cost $ 90 2. Assume that the company uses variable costing. Prepare a contribution format income statement for the year. Chuck Wagon Grills, Inc. Variable Costing Income Statement Sales Variable expenses: Variable cost of goods sold Variable selling and administrative 0 Contribution margin 0 Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative 0 Net operating income 3. What is the company's break-even point in terms of the number of barbecue grills sold? Break-even point units
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