Question

Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $205. Data for last year’s operations follow: Units in beginning inventory 0 Units produced 10,300 Units sold 9,100 Units in ending inventory 1,200 Variable costs per unit: Direct materials $ 61 Direct labor 38 Variable manufacturing overhead 10 Variable selling and administrative 17 Total variable cost per unit $ 126 Fixed costs: Fixed manufacturing overhead $ 339,900 Fixed selling and administrative 510,000 Total fixed costs $ 849,900 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.

Assume that the company uses absorption costing. Compute the unit product cost for one barbecue grill.

Unit product cost

Assume that the company uses absorption costing. Prepare an income statement for last year.

Chuck Wagon Grills, Inc.
Absorption Costing Income Statement
Net operating income (loss)

Answer 1