Question
Product Cost Method of Product Costing MyPhone, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing
Product Cost Method of Product Costing
MyPhone, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,950 units of cell phones are as follows:
Variable costs: | Fixed costs: | |||||||
Direct materials | $82 | per unit | Factory overhead | $199,100 | ||||
Direct labor | 38 | Selling and admin. exp. | 71,600 | |||||
Factory overhead | 23 | |||||||
Selling and admin. exp. | 19 | |||||||
Total variable cost per unit | $162 | per unit |
MyPhone desires a profit equal to a 14% rate of return on invested assets of $600,600.
a. Determine the amount of desired profit from the production and sale of 4,950 units of cell phones. $
b. Determine the product cost per unit for the production of 4,950 of cell phones. If required, round your answer to nearest dollar. $ per unit
c. Determine the product cost markup percentage (rounded to two decimal places) for cell phones. %
d. Determine the selling price of cell phones. Round to the nearest dollar.
Total Cost | $per unit |
Markup | per unit |
Selling price | $per unit |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started