Total Cost Method of Product Pricing Smart Stream Inc. uses the total cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 8,500 units of cell phones are as follows

Smart Stream desires a profit equal to a 14% return on invested assets of $1,179,190.

a. Determine the total cost and the total cost amount per unit for the production and sale of 8,500 units of cellular phones. Round the cost per unit to two decimal places

 

b. Determine the total cost markup percentage (rounded to two decimal places) for cellular phones _____%.

c. Determine the selling price of cellular phones. Round to the nearest cent.  ______ % per cellular phone.

Variable costs: Fixed costs: Direct materials $ 93 per unit Factory overhead $396,300 Direct labor 43 Selling and administrative expenses 139,200 Factory overhead 28 Selling and administrative expenses 22 Total variable cost per unit $186 per unit