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Question: chuck wagon grills inc makes a single producta handmade specialty...

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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 0
  Units produced 9,800
  Units sold 9,000
  Units in ending inventory 800
  Variable costs per unit:
      Direct materials $   60
      Direct labor 20
      Variable manufacturing overhead 10
      Variable selling and administrative 30
      Total variable cost per unit $ 120
  Fixed costs:
      Fixed manufacturing overhead $ 220,000
      Fixed selling and administrative 500,000
      Total fixed costs $ 720,000

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 the year

3. What is the company’s break-even point in terms of the number of barbecue grills sold?

  
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