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 4,540 cell phones are as follows:
Variable costs per unit: | Fixed costs: | |||||||
Direct materials | $63 | Factory overhead | $199,000 | |||||
Direct labor | 39 | Selling and administrative expenses | 69,400 | |||||
Factory overhead | 27 | |||||||
Selling and administrative expenses | 23 | |||||||
Total variable cost per unit | $152 |
MyPhone desires a profit equal to a 15% rate of return on invested assets of $601,200.
a. Determine the amount of desired profit from the production and sale of 4,540 cell phones. $fill in the blank 1
b. Determine the product cost per unit for the production of 4,540 of cell phones. Round your answer to the nearest whole dollar. $fill in the blank 2 per unit
c. Determine the product cost markup percentage for cell phones. Round your answer to two decimal places. fill in the blank 3 %
d. Determine the selling price of cell phones. Round your answers to the nearest whole dollar.
Total Cost | $fill in the blank 4per unit |
Markup | fill in the blank 5per unit |
Selling price | $fill in the blank 6per unit |
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