Chuck Wagon Grills, Inc., makes a single producta handmade specialty barbecue grill that it sells for $215. Data for last years operations follow:

Units in beginning inventory		0
Units produced		9,800
Units sold		9,100
Units in ending inventory		700
Variable costs per unit:
Direct materials	$	62
Direct labor		37
Variable manufacturing overhead		14
Variable selling and administrative		19
Total variable cost per unit	$	132
Fixed costs:
Fixed manufacturing overhead	$	303,800
Fixed selling and administrative		510,000
Total fixed costs	$	813,800

Required:

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 for last year.

Complete this question by entering your answers in the tabs below.

• Required 1

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

Unit product cost

• Required 2

Assume that the company uses absorption costing. Prepare an income statement for last year.

Chuck Wagon Grills, Inc.
Absorption Costing Income Statement
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income (loss)