Reference no: EM132872491
Question - 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 -
1. Assume that the company uses absorption costing. Compute the unit product cost for one barbecue grill.
2. Assume that the company uses absorption costing. Prepare income statement for last year.