Chuck Wagon Grills, Incorporated, makes a single product-a handmade specialty barbecue grill that it sells for $210. Data for last year's operations follow: Units in beginning inventory Units produced Units sold 20,000 19,000 1,000 Units in ending inventory Variable costs per unit: Direct materials $ 50 Direct labor 80 Variable manufacturing overhead Variable selling and administrative Total variable cost per unit 20 10 $ 160 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 700,000 285,000 $ 985,000 Total fixed costs 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?
Chuck Wagon Grills, Incorporated, makes a single product-a handmade specialty barbecue grill that it sells for $210. Data for last year's operations follow: Units in beginning inventory Units produced Units sold 20,000 19,000 1,000 Units in ending inventory Variable costs per unit: Direct materials $ 50 Direct labor 80 Variable manufacturing overhead Variable selling and administrative Total variable cost per unit 20 10 $ 160 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 700,000 285,000 $ 985,000 Total fixed costs 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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I need the answer to require 2 and 3.
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Required information
[The following information applies to the questions displayed below.]
Chuck Wagon Grills, Incorporated, makes a single product-a handmade specialty barbecue grill that it sells for $210. Data
for last year's operations follow:
Units in beginning inventory
Units produced
20,000
Units sold
19,000
1,000
Units in ending inventory
Variable costs per unit:
Direct materials
$ 50
Direct labor
80
Variable manufacturing overhead
Variable selling and administrative
20
10
Total variable cost per unit
$ 160
Fixed costs:
Fixed manufacturing overhead
Fixed selling and administrative
$ 700,000
285,000
$ 985,000
Total fixed costs
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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F87f377c8-556b-40c3-ad73-583aac17d9d0%2F097535ff-ab42-4976-8f0b-c338a14ecc17%2F7nun4nj_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
Chuck Wagon Grills, Incorporated, makes a single product-a handmade specialty barbecue grill that it sells for $210. Data
for last year's operations follow:
Units in beginning inventory
Units produced
20,000
Units sold
19,000
1,000
Units in ending inventory
Variable costs per unit:
Direct materials
$ 50
Direct labor
80
Variable manufacturing overhead
Variable selling and administrative
20
10
Total variable cost per unit
$ 160
Fixed costs:
Fixed manufacturing overhead
Fixed selling and administrative
$ 700,000
285,000
$ 985,000
Total fixed costs
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?
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