Exercise 7-14 Variable Costing Unit Product Cost and Income Statement; Break-Even Analysis (LO7-1, LO7-2) 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: Direct materials 9,500 8,700 800 24 80 20 10 30 Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit 24 140 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 170,000 160,000 $ 330,000 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?

Exercise 7-14 Variable Costing Unit Product Cost and Income Statement; Break-Even Analysis (LO7-1, LO7-2) 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: Direct materials 9,500 8,700 800 24 80 20 10 30 Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit 24 140 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 170,000 160,000 $ 330,000 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?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 4CE: Refer to Cornerstone Exercise 18.3. Required: 1. Calculate the cost of each unit using variable...

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

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Exercise 7-14 Variable Costing Unit Product Cost and Income Statement; Break-Even Analysis [LO7-1,
LO7-2]
Chuck Wagon Grills, Inc., makes a single product-a handmade specialty barbecue grill that it sells for $200. Data for last year's
operations follow:
Units in beginning inventory
Units produced
Units sold
Units in ending inventory
Variable costs per unit:
Direct materials
9,500
8,700
800
24
80
20
10
30
Direct labor
Variable manufacturing overhead
Variable selling and administrative
2$
Total variable cost per unit
140
Fixed costs:
Fixed manufacturing overhead
Fixed selling and administrative
$ 170,000
160,000
$ 330,000
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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Exercise 7-14 Variable Costing Unit Product Cost and Income Statement; Break-Even Analysis [LO7-1, LO7-2] Chuck Wagon Grills, Inc., makes a single product-a handmade specialty barbecue grill that it sells for $200. Data for last year's operations follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor 9,500 8,700 800 2$ Variable manufacturing overhead Variable selling and administrative 80 20 10 30 Total variable cost per unit 140 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Total fixed costs $ 170,000 160,000 $ 330,000 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?
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Exercise 3 (Variable Costing Unit Product Cost and Income Statement; Break-even) PC Desk, Inc., makes an oak desk specially designed for personal computers. The desk sells for P2,000. Data for last year's operations follow: Units in beginning inventor.. Units produced.. Units sold. Units in ending inventory. 10,000 9,000 1,000 Variable costs per unit: Direct materials.. Direct labor Variable manufacturing overhead. Variable selling and administrative Total variable cost per unit. . P 600 300 100 200 P1,200 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative. Total fixed costs... P3,000,000 4,500,000 P7,500,000 Required: 1. Assume that the company uses variable costing. Compute the unit product cost for one computer desk. 2. Assume that the company uses variable costing. Prepare an income statement for the year using the contribution format. 3. What is the company's break-even point in terms of units sold?
Question 1 Smart Technology Company had the following information during the previous year for one of its product lines: Sales Price per Unit $6000 Units in Beginning Inventory 0 Units Started During the Year 55,000 Units Sold 52,000 Variable Costs per Unit: Direct Materials $145 Direct Labor $200 Variable Overhead Costs $75 Fixed Costs: Fixed Overhead per Unit $50 General and Administrative $1,250,000 1. Calculate the ending inventory value and prepare an income statement using absorption costing. 2. Calculate the ending inventory value and prepare an income statement using variable costing.
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A7
PROBLEM 1- Speed Corporation produces and sells a single product, a wooden hand loom for weaving small items such as scarves. Selected cost and operating data relating to the product for two years are given below: Selling price per unit Manufacturing costs: Variable per unit produced: Direct materials Direct labor Variable overhead Fixed per year Selling and administrative costs: Variable per unit sold Fixed per year Units in beginning inventory Units produced during the year Units sold during the year Units in ending inventory P50 P11 P 6 P 3 P120,000 P 4 P70,000 Year 1 0 10,000 8,000 2,000 Required: 1. Assume the company uses absorption costing. a. Compute the unit product cost in each year. b. Prepare an income statement for each year. 2. Assume the company uses variable costing. Year 2 2,000 6,000 8,000 0 a. Compute the unit product cost in each year. b. Prepare an income statement for each year. 3. Reconcile the variable costing and absorption costing net operating incomes.