Question
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
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 10,000 Units sold 8,600 Units in ending inventory 1,400 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 $ 160,000 Fixed selling and administrative 800,000 Total fixed costs $ 960,000 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. 3. What is the companys break-even point in terms of the number of barbecue grills sold?
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