Chuck Wagon Grills, Inc., makes a single productâa handmade specialty barbecue grill that it sells for $200. Data for last yearâs operations follow:
Units in beginning inventory 0
Units produced 9,700
Units sold 9,100
Units in ending inventory 600
Variable costs per unit:
Direct materials $ 63
Direct labor 35
Variable manufacturing overhead 12
Variable selling and administrative 15
Total variable cost per unit $ 125
Fixed costs:
Fixed manufacturing overhead $ 281,300
Fixed selling and administrative 510,000
Total fixed costs $ 791,300
Required:
1.
Assume that the company uses absorption costing. Compute the unit product cost for one barbecue grill.
2.
Assume that the company uses absorption costing. Prepare an income statement.
Chuck Wagon Grills, Inc., makes a single productâa handmade specialty barbecue grill that it sells for $200. Data for last yearâs operations follow:
Units in beginning inventory 0
Units produced 9,700
Units sold 9,100
Units in ending inventory 600
Variable costs per unit:
Direct materials $ 63
Direct labor 35
Variable manufacturing overhead 12
Variable selling and administrative 15
Total variable cost per unit $ 125
Fixed costs:
Fixed manufacturing overhead $ 281,300
Fixed selling and administrative 510,000
Total fixed costs $ 791,300
Required:
1.
Assume that the company uses absorption costing. Compute the unit product cost for one barbecue grill.
2.
Assume that the company uses absorption costing. Prepare an income statement.
