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

10,400

Units sold

9,400

Units in ending inventory

1,000

Variable costs per unit:

Direct materials

$ 65

Direct labor

33

Variable manufacturing overhead

11

Variable selling and administrative

17

Total variable cost per unit

$ 126

Fixed costs:

Fixed manufacturing overhead

$

301,600

Fixed selling and administrative

505,000

Total fixed costs

$

806,600

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

2.	Assume that the company uses absorption costing. Prepare an income statement.