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 5,500 cell phones are as follows: Variable costs per unit: Line Item Description Amount Direct materials $84 Direct labor 35 Factory overhead 27 Selling and administrative expenses 18 Total variable cost per unit $164 Fixed costs: Line Item Description Amount Factory overhead $202,000 Selling and administrative expenses 68,000 MyPhone