Product Cost Concept of Product Costing

Parts A-D Please.

MyPhone Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 5,370 cellular phones are as follows:

Variable costs:						Fixed costs:
	Direct materials		$86	per unit			Factory overhead	$200,300
	Direct labor		30				Selling and administrative expenses	68,700
	Factory overhead		27
	Selling and administrative expenses		19
		Total	$162	per unit

MyPhone wants a profit equal to a 15% rate of return on invested assets of $601,300.

a. Determine the amount of desired profit from the production and sale of 5,370 cellular phones. $____

b. Determine the product cost and the cost amount per unit for the production of 5,370 cellular phones. If required, round your answer to nearest dollar. $___

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