Question
MyPhone, Inc., uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 5,360 units of cellular
MyPhone, Inc., uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 5,360 units of cellular phones are as follows:
Variable costs: | Fixed costs: | |||||||
Direct materials | $88 | per unit | Factory overhead | $198,900 | ||||
Direct labor | 34 | Selling and admin. exp. | 71,100 | |||||
Factory overhead | 28 | |||||||
Selling and admin. exp. | 21 | |||||||
Total | $171 | per unit |
MyPhone desires a profit equal to a 14% rate of return on invested assets of $598,400.
a. Determine the amount of desired profit from the production and sale of 5,360 units of cellular phones. $
b. Determine the cost amount per unit for the production of 5,360 units of cellular phones. If required, round your answer to nearest dollar. $ per unit
c. Determine the product cost markup percentage (rounded to two decimal places) for cellular phones. %
d. Determine the selling price of cellular phones. Round to the nearest dollar.
Cost | $per unit |
Markup | $per unit |
Selling price | $per unit |
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