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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
24,800
Units sold
21,400
Units in ending inventory
3,400
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
$ 868,000
Fixed selling and administrative
321,000
Total fixed costs
$ 1,189,000
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 for last year.
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