Reference no: EM132593809

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

Units in beginning inventory 0

Units produced 9,800

Units sold 8,300

Units in ending inventory 1,500

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$150,000

Fixed selling and administrative 1,290,000

Total fixed costs$1,440,000

Required:

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

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

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