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Chuck Wagon Grills, Incorporated, 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 Units produced 20,000 19,000 1,000 Units sold Units in ending inventory Variable costs per unit: Direct materials $ 50 Direct labor 80 Variable manufacturing overhead Variable selling and administrative 20 10 Total variable cost per unit $ 160 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 700,000 285,000 Total fixed costs $ 985,000 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.

Chuck Wagon Grills, Incorporated, 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 Units produced 20,000 19,000 1,000 Units sold Units in ending inventory Variable costs per unit: Direct materials $ 50 Direct labor 80 Variable manufacturing overhead Variable selling and administrative 20 10 Total variable cost per unit $ 160 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 700,000 285,000 Total fixed costs $ 985,000 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.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...
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Chuck Wagon Grills, Incorporated, 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 Units produced 20,000 19,000 1,000 Units sold Units in ending inventory Variable costs per unit: Direct materials $ 50 Direct labor 80 Variable manufacturing overhead Variable selling and administrative 20 10 Total variable cost per unit $ 160 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 700,000 285,000 $ 985,000 Total fixed costs 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.
Transcribed Image Text:Chuck Wagon Grills, Incorporated, 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 Units produced 20,000 19,000 1,000 Units sold Units in ending inventory Variable costs per unit: Direct materials $ 50 Direct labor 80 Variable manufacturing overhead Variable selling and administrative 20 10 Total variable cost per unit $ 160 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 700,000 285,000 $ 985,000 Total fixed costs 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.
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