Question

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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: 10,000 9,400 600 63 Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Total fixed costs 125 $ 320,000 520,000 $ 840,000 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assume that the company uses absorption costing. Compute the unit product cost for one barbecue grill. Unit product cost Required 1 Required 2 >

Answer 1

Requirement: 1 Chuck wagon Unit Product cost using Absorption Costing Direct Material Direct Labour Variable Manufacturing Overhead Fixed Manufacturing Over head (32000/10000) Unit Product cost 63.00 31.00 14.00 32.00 140.00 Requirement: 2 Chuck wagon Absorption Costing Income Statement Sales (9400 * $210) Cost of Goods Sold Gross Margin Selling and Administrative Overheads Operating Income or loss 1974000 1316000 658000 679800 -21800