Exercise 6-14 Variable Costing Unit Product Cost and Income Statement; Break-Even [LO6-1, LO6-2]

Chuck Wagon Grills, Inc., makes a single producta handmade specialty barbecue grill that it sells for $200. Data for last years operations follow:

Units in beginning inventory		0
Units produced		10,200
Units sold		8,600
Units in ending inventory		1,600
Variable costs per unit:
Direct materials		$ 80
Direct labor		40
Variable manufacturing overhead		10
Variable selling and administrative		30
Total variable cost per unit		$ 160
Fixed costs:
Fixed manufacturing overhead	$	240,000
Fixed selling and administrative		100,000
Total fixed costs	$	340,000

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 the year.

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