As the marketing manager for Fast Fones Industries Pty Ltd you have asked the accountant what it costs to make the FFI2020 model as you want to set a price for the phone. A similar phone produced by a competitor sells for $420. Your usual pricing policy is to set the price of phones at the cost of manufacturing plus 100% mark-up. The accountant has given you the following costs: Required Calculate the cost and the price of the FFI2020 using each of the factory overhead rates that the accountant has supplied. How do the different allocation methods for factory overhead affect the pricing of the FFI2020 compared to the price of the competition and what are the likely implications of this for the marketability of the phone? L As the market price of a similar phone is $420 if the overhead is allocated on the basis of machine hours then the FFI2020 would be competitively priced. If the overhead is allocated on either of the other two allocation bases they may have difficulty competing in the market. Fast Fones Industries Pty Ltd also has. to ensure that the method of allocation of overhead results in all overhead costs being covered by the pricing otherwise the company could be under pricing the phones and operating at a loss. As the marketing manager for Fast Fones Industries Pty Ltd you have asked the accountant what it costs to make the FFI2020 model as you want to set a price for the phone. A similar phone produced by a competitor sells for $420. Your usual pricing policy is to set the price of phones at the cost of manufacturing plus 100% mark-up. The accountant has given you the following costs: Required Calculate the cost and the price of the FFI2020 using each of the factory overhead rates that the accountant has supplied. How do the different allocation methods for factory overhead affect the pricing of the FFI2020 compared to the price of the competition and what are the likely implications of this for the marketability of the phone? L As the market price of a similar phone is $420 if the overhead is allocated on the basis of machine hours then the FFI2020 would be competitively priced. If the overhead is allocated on either of the other two allocation bases they may have difficulty competing in the market. Fast Fones Industries Pty Ltd also has. to ensure that the method of allocation of overhead results in all overhead costs being covered by the pricing otherwise the company could be under pricing the phones and operating at a loss