3 Chuck Wagon Grils, Inc, makes a single operations follow uct-a handmade specia
ID: 2559213 • Letter: 3
Question
3 Chuck Wagon Grils, Inc, makes a single operations follow uct-a handmade specialty barbecue grill hat it sells for $200. Data for last year's specialty ba Units in beginning inventory Units produced 10,400 8,380 2,100 ooson 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 $80 20 10 30 Print S 140 Fixed costs: Fixed manufacturing overhead $168,e00 Fixed selling and administrative 290,990 $450,00e References Total fixed costs 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 griis sold? Complete this question by entering your answers in the tabs below Required 1 Required 2 Requined 3 Assume that the company uses variable costing. Compute the unit preduct eost for ane barbecue gril Required 2Explanation / Answer
Answer
Product Unit Cost per unit
Direct Material
$ 80.00
Direct labor
$ 20.00
Variable manufacturing Overhead
$ 10.00
Total Product Unit Cost
$ 110.00
Under Variable costing, fixed cost and overheads are not considered as part of ‘product cost’
Selling & Admin expenses (both variable and fixed) will not form Product unit cost.
Sales
8300 x 200
$ 16,60,000.00
(-) Variable Costs:
Direct material
8300 x 80
$ 6,64,000.00
Direct labor
8300 x 20
$ 1,66,000.00
Variable manufacturing overhead
8300 x 10
$ 83,000.00
Variable selling overhead
8300 x 30
$ 2,49,000.00
Total variable cost
8300 x 140
$ 11,62,000.00
Contribution Margin
1660000-1162000
$ 4,98,000.00
(-) Fixed Costs:
manufacturing Overhead
[given]
$ 1,60,000.00
Selling & Admin expenses
[given]
$ 2,90,000.00
Total Fixed Cost
$ 4,50,000.00
Net Income
498000 - 450000
$ 48,000.00
Fixed Cost
$450000
[given]
Contribution Margin
$498000
[calculated above]
Units Sold
8300
[given]
Contribution per unit
$60
498000/8300
Break Even point I Units =
7500 units
450000 [fixed cost]/60 [contribution per unit]
Product Unit Cost per unit
Direct Material
$ 80.00
Direct labor
$ 20.00
Variable manufacturing Overhead
$ 10.00
Total Product Unit Cost
$ 110.00
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