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      10,200

Units sold      8,700

Units in ending inventory      1,500

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   $   180,000

Fixed selling and administrative      180,000

Total fixed costs   $   360,000

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 company’s break-even point in terms of the number of barbecue grills sold?