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.