Question

Chuck Wagon Grills, Inc., makes a single product - a handmade specialty barbecue grill that it sells for $210. Data for last year's operations follow:Units in beginning inventory 0units produced 20,000units sold 19,000units in ending inventory 1,000Variable costs per unit:Direct materials $50Direct Labor 80Variable manufacturing overhead 20Variable selling and admin. 10Total variable cost per unit $160Fixed Costs:Fixed Manufacturing Overhead $700,000Fixed Selling and Admin. 285,000Total Fixed Costs $985,0001. Assume the company uses variable costing. Compute the unit product cost for one barbecue grill.2. Assume 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 of the number of barbecue grills sold?

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Chuck Wagon Grills, Inc., makes a single product - a handmade specialty barbecue grill that it sells for $210.

Data for last year's operations follow:

Units in beginning inventory 0

units produced 20,000

units sold 19,000

Variable costs per unit:

Direct materials $50

Direct Labor 80

Variable manufacturing overhead 20

Variable selling and admin. 10

Total variable cost per unit $160

Fixed Costs:

Fixed Manufacturing Overhead $700,000

Fixed Selling and Admin. 285,000

Total Fixed Costs $985,000

1) Unitary variable costs= direct material + direct labor + variable overhead + variable selling and administrative= 160

2) Income statement:

Sales= 19,000*210= 3,990,000

Variable costs= 19,000*160= (3,040,000)

Contribution margin= 950,000

Total fixed costs= (985,000)

Net operating income= (35,000)

3) Break-even point= fixed costs/ contribution margin

Break-even point= 985,000/ 50= 19,700 units

Answer 2

Unit Product Cost = $185, Operating Income = $0, Break-even point = 19,700 units.

Fixed manufacturing overhead = FMOH / Unit produced

Fixed manufacturing overhead = 700,000 / 20,000

Fixed manufacturing overhead = 35

Unit cost underAbsorption costing

Direct materials                                     $50

Direct labor                                            $80

Various manufacturing overhead        $20

Fixed manufacturing overhead            $35

Unit product cost                                  $185

Income statement (Absorption costing)

Sales revenue                        $3,990,000 (19000*210)

Cost of goods sold                $3,515,000 (19000*185)

Gross profit                            $475,000

Operating expenses              $475,000   (19000*10 + 285000)

Operating income                 $0

Break-even point = Fixed costs / Contribution margin

Break-even point = $985,000/ 50

Break-even point = 19,700 units.

See similar solution here

brainly.com/question/22380687