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?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Chuck Wagon Grills, Inc., 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
26,000
22,000
4,000
Units sold
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
$ 910,000
330,000
$1,240,000
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%2F3aae7596-3576-430c-82f6-10ee55882af9%2Fc3d21529-5e70-4929-b822-09352932135e%2Fgx6sr5_processed.png&w=3840&q=75)
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