Question
Assume Samsung is designing a new smartphone. Each unit of this new phone is expected to require $285 of direct materials, $10 of direct labor,
Assume Samsung is designing a new smartphone. Each unit of this new phone is expected to require $285 of direct materials, $10 of direct labor, $30 of variable overhead, $5 of variable selling and administrative costs, and $20 of fixed selling and administrative costs. Required 1. If Samsung uses the variable cost method to set selling prices and plans a markup of 250% of variable costs, what is the expected selling price per unit of this new phone?
2. If instead Samsung uses the total cost method to set selling prices and plans a markup of 220% of total costs, what is the expected selling price per unit of this new phone?
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