Reference no: EM132822166
Chuck Wagon Grills, Inc., makes a single product-a handmade specialty barbecue grill that it sells for $215. Data for last year's operations follow:
Units in beginning inventory 0
Units produced 9,900
Units sold 9,400
Units in ending inventory 500
Variable costs per unit:
Direct materials$64
Direct labor 35
Variable manufacturing overhead 12
Variable selling and administrative 19
Total variable cost per unit$ 130
Fixed costs:
Fixed manufacturing overhead$287,100
Fixed selling and administrative 505,000
Total fixed costs$792,100
Required:
Problem 1. Assume that the company uses absorption costing. Compute the unit product cost for one barbecue grill.
Problem 2. Assume that the company uses absorption costing. Prepare income statement for last year.