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Item 4

Item 4 1.11 points

Chuck Wagon Grills, Inc., makes a single producta handmade specialty barbecue grill that it sells for $300. Data for last years operations follow:

Units in beginning inventory		0
Units produced		9,600
Units sold		8,200
Units in ending inventory		1,400
Variable costs per unit:
Direct materials	$	80
Direct labor		20
Variable manufacturing overhead		10
Variable selling and administrative		30
Total variable cost per unit	$	140
Fixed costs:
Fixed manufacturing overhead	$	180,000
Fixed selling and administrative		1,100,000
Total fixed costs	$	1,280,000

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?

format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above.