Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $200. Data for last year’s operations follow:
Units in beginning inventory | 0 | |
Units produced | 10,400 | |
Units sold | 8,800 | |
Units in ending inventory | 1,600 | |
Variable costs per unit: | ||
Direct materials | $ | 60 |
Direct labor | 20 | |
Variable manufacturing overhead | 10 | |
Variable selling and administrative | 30 | |
Total variable cost per unit | $ | 120 |
Fixed costs: | ||
Fixed manufacturing overhead | $ | 150,000 |
Fixed selling and administrative | 290,000 | |
Total fixed costs | $ | 440,000 |
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 company’s break-even point in terms of the number of barbecue grills sold?
1 | |||
Direct materials | 60 | ||
Direct labor | 20 | ||
Variable manufacturing overhead | 10 | ||
Unit product cost | 90 | ||
2 | |||
Chuck Wagon Grills, Inc. | |||
Variable Costing Income Statement | |||
Sales | 1760000 | =8800*200 | |
Variable expenses: | |||
Variable cost of goods sold | 792000 | =8800*90 | |
Variable selling and administrative | 264000 | =8800*30 | |
1056000 | |||
Contribution margin | 704000 | ||
Fixed expenses: | |||
Fixed manufacturing overhead | 150000 | ||
Fixed selling and administrative | 290000 | ||
440000 | |||
Net operating income | 264000 | ||
3 | |||
Total fixed costs | 440000 | ||
Divide by Unit Contribution margin | 80 | =200-120 | |
Break-even point in units | 5500 |
Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for...
Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $215. Data for last year’s operations follow: Units in beginning inventory 0 Units produced 10,400 Units sold 9,300 Units in ending inventory 1,100 Variable costs per unit: Direct materials $ 64 Direct labor 32 Variable manufacturing overhead 13 Variable selling and administrative 16 Total variable cost per unit $ 125 Fixed costs: Fixed manufacturing overhead $ 364,000 Fixed selling and administrative 525,000 Total fixed...
Chuck Wagon Grills, Inc., makes a single product-a handmade specialty barbecue grill that it sells for $200. Data for last year's operations follow: 10,400 9,500 900 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 $ 64 Total variable cost per unit $ 136 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 312,000 520,000 Total fixed costs $ 832,000 Required:...
Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $300. Data for last year’s operations follow: Units in beginning inventory 0 Units produced 9,600 Units sold 8,600 Units in ending inventory 1,000 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 $ 170,000 Fixed selling and administrative 1,030,000 Total fixed...
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: Units in beginning inventory 0 Units produced 20,000 Units sold 19,000 Units in ending inventory 1,000 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 $ 700,000 Fixed selling and administrative 285,000 Total fixed...
Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $215. Data for last year’s operations follow: Units in beginning inventory 0 Units produced 9,800 Units sold 9,100 Units in ending inventory 700 Variable costs per unit: Direct materials $ 63 Direct labor 39 Variable manufacturing overhead 12 Variable selling and administrative 21 Total variable cost per unit $ 135 Fixed costs: Fixed manufacturing overhead $ 313,600 Fixed selling and administrative 520,000 Total fixed...
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: 0 20,000 19,000 1,000 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 $ 50 Total variable cost per unit $ 160 Fixed costs: Fixed manufacturing overhead $700,000 Fixed selling and administrative 285,000 Total fixed costs $985,000 Required: 1....
Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $300. Data for last year’s operations follow: Units in beginning inventory 0 Units produced 10,100 Units sold 8,100 Units in ending inventory 2,000 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 $ 170,000 Fixed selling and administrative 1,270,000 Total...
Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $300. Data for last year’s operations follow: Units in beginning inventory 0 Units produced 9,700 Units sold 8,900 Units in ending inventory 800 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 $ 150,000 Fixed selling and administrative 890,000 Total...
Chuck Wagon Grills, Inc., makes a single product-a handmade specialty barbecue grill that it sells for $200. Data for last year's operations follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: 10,400 8,200 2,200 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit 60 20 10 30 120 Fixed costs: Pixed manufacturing overhead Pixed selling and administrative Total fixed costs 160,000 240,000 400,000 Required 1....
Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $200. Data for last year’s operations follow: Units in beginning inventory 0 Units produced 10,100 Units sold 8,000 Units in ending inventory 2,100 Variable costs per unit: Direct materials $ 60 Direct labor 40 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 240,000 Total...