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		9,600
Units sold		8,600
Units in ending inventory		1,000
Variable costs per unit:
Direct materials	$	80
Direct labor		20
Variable manufacturing overhead		10
Variable selling and administrative		30
Total variable cost per unit	$	140
Fixed costs:
Fixed manufacturing overhead	$	170,000
Fixed selling and administrative		1,030,000
Total fixed costs	$	1,200,000

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?

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

Unit product cost

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

Chuck Wagon Grills, Inc.
Variable Costing Income Statement
		0
		0
		0
		$0

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

  Break-even point

  units