Chuck Wagon Grills, Inc., makes a single product-a handmade specialty barbecue g

Question

Chuck Wagon Grills, Inc., makes a single product-a handmade specialty barbecue grill that it sells for $205. Data for last year's operations follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: 10,300 9,200 1,100 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit 63 40 13 16 132 Fixed costs: Pixed manufacturing overhead Pixed selling and administrative Total fixed costs $350,200 515,000 $865,200 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 yean

Explanation / Answer

Unit product cost :

Income statement :

Direct material 63 Direct labour 40 variable manufacturing overhead 13 Fixed manufacturing overhead 34 Unit product cost 150

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