Question
Required information Skip to question [The following information applies to the questions displayed below.] Chuck Wagon Grills, Incorporated, makes a single producta handmade specialty barbecue
Required information
Skip to question
[The following information applies to the questions displayed below.]
Chuck Wagon Grills, Incorporated, makes a single producta handmade specialty barbecue grill that it sells for $210. Data for last years operations follow:
Units in beginning inventory | 0 |
---|---|
Units produced | 26,000 |
Units sold | 22,000 |
Units in ending inventory | 4,000 |
Variable costs per unit: | |
Direct materials | $ 50 |
Direct labor | 80 |
Variable manufacturing overhead | 20 |
Variable selling and administrative | 10 |
Total variable cost per unit | $ 160 |
Fixed costs: | |
Fixed manufacturing overhead | $ 910,000 |
Fixed selling and administrative | 330,000 |
Total fixed costs | $ 1,240,000 |
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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