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Chuck Wagon Grills, Incorporated, makes a single producta handmade specialty barbecue grill that it sells...

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Accounting

Chuck Wagon Grills, Incorporated, makes a single producta handmade specialty barbecue grill that it sells for $210. Data for last years operations follow:

Units in beginning inventory 0
Units produced 20,000
Units sold 19,000
Units in ending inventory 1,000
Variable costs per unit:
Direct materials $ 50
Direct labor 80
Variable manufacturing overhead 20
Variable selling and administrative 10
Total variable cost per unit $ 160
Fixed costs:
Fixed manufacturing overhead $ 700,000
Fixed selling and administrative 285,000
Total fixed costs $ 985,000

Required:

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 last year.

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

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