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Chuck Wagon Grills, Inc., makes a single producta handmade specialty barbecue grill that it sells for $200. Data for last years operations follow: Units in

Chuck Wagon Grills, Inc., makes a single producta handmade specialty barbecue grill that it sells for $200. Data for last years operations follow:

Units in beginning inventory 0
Units produced 10,300
Units sold 8,900
Units in ending inventory 1,400
Variable costs per unit:
Direct materials $ 80
Direct labor 40
Variable manufacturing overhead 10
Variable selling and administrative 30
Total variable cost per unit $ 160
Fixed costs:
Fixed manufacturing overhead $ 190,000
Fixed selling and administrative 150,000
Total fixed costs $ 340,000

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?

  • Required 1

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

Unit product cost

  • Required 2

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

Chuck Wagon Grills, Inc.
Variable Costing Income Statement

  • Required 3

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

Break-even point units

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