Reference no: EM132821734

Chuck Wagon Grills, Inc. makes a single product-a handmade specialty barbecue grill that sells for $300. Data for last year's operations follow:

Units in beginning inventory 0
Units produced 10,200
Units sold 8,500
Units in ending inventory 1,700

Variable costs per unit:
Direct materials$80
Direct labor 20
Variable manufacturing overhead 10
Variable selling and administrative 30
Total variable cost per unit$140

Fixed costs:
Fixed manufacturing overhead$190,000
Fixed selling and administrative 770,000
Total fixed costs$960,000

Required:

Problem 1. Assume that the company uses variable costing. Compute the unit product cost for one barbecue grill.

Problem 2. Assume that the company uses variable costing. Prepare contribution format income statement for last year.

Problem 3. What is the company's break-even point regarding the number of barbecue grills sold?