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 $200. Data for last year’s operations follow:

  

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?

Units in beginning inventory 0 Units produced 10,100 Units sold 8,200 Units in ending inventory 1,900 Variable costs per unit: Direct materials $ 60 Direct labor 40 Variable manufacturing overhead 10 Variable selling and administrative 30 Total variable cost per unit $ 140 Fixed costs: Fixed manufacturing overhead $ 190,000 Fixed selling and administrative 320,000 Total fixed costs $ 510,000 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: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: 10,100 8,200 1,900 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit 60 40 10 30 140 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Total fixed costs s 190,000 320,000 510,000 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? Complete this question by entering your answers in the tabs below. Required1 Required 2 Required Assume that the company uses variable costing. Prepare a contribution format income statement for last year. Chuck Wagon Grills, Inc. Variable Costing Income Statement Sales $ 1,640,000 1,640,000 $ 1,640,000

Explanation / Answer

1.

2.

3.

Cost per unit Variable costing Direct material cost $                            60 Direct Labour $                            40 Variable manufacturing overhead $                            10 Cost per unit $                          110

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