Product Cost Concept of Product Costing

MyPhone Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 5,020 cellular phones are as follows:

Variable costs:						Fixed costs:
	Direct materials		$66	per unit			Factory overhead	$200,200
	Direct labor		34				Selling and administrative expenses	70,500
	Factory overhead		24
	Selling and administrative expenses		22
		Total	$146	per unit

MyPhone wants a profit equal to a 16% rate of return on invested assets of $598,900.

a. Determine the amount of desired profit from the production and sale of 5,020 cellular phones. $

b. Determine the product cost and the cost amount per unit for the production of 5,020 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
Selling price	$	per unit