Saved gon Grills, Inc., makes a single product-a handmade specialty barbecue gri

Question

Saved gon Grills, Inc., makes a single product-a handmade specialty barbecue gril that it sells for $220. Data for last year's operations follow Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: 10,500 9,300 1,200 $ 65 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit 13 17 $ 128 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Total fixed costs 357,600 515,000 $872,006 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 Required 2 Assume that the company uses absorption costing. Compute the unit product cost for one barbecue grill Unit product cost Required 2

Explanation / Answer

a) Unit product cost under absorption costing :

b) Absorption costing income statement :

Absorption costing Direct material 65 Direct labour 33 Variable manufacturing overhead 13 Fixed manufacturing overhead (357000/10500) 34 Unit product cost 145

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