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Chuck Wagon Grills, Inc., makes a single product-a handmade specialty barbecue grill that it sells for $200. Data for last year's operations follow: 0 10,300
Chuck Wagon Grills, Inc., makes a single product-a handmade specialty barbecue grill that it sells for $200. Data for last year's operations follow: 0 10,300 8,800 1,500 $ Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Total fixed costs 60 20 10 30 $ 120 $ 170,000 310,000 $ 480,000 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 company's break-even point in terms of the number of barbecue grills sold? Chuck Wagon Grills, Inc. Variable Costing Income Statement Sales Variable expenses: Indirect materials Indirect labor Fixed manufacturing overhead Fixed selling and administrative expenses Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expenses 0 0 0 Fixed selling and administrative expenses Net operating income 0
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