Product Cost Method of Product Costing Smart Stream Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $150 Factory overhead $350,000 Selling and administrative Direct labor 25 140,000 expenses Factory overhead 40 Selling and administrative expenses 25 Total variable cost per unit $240 Smart Stream desires a profit equal to a 30% return on invested assets of $1,200,000. a. Determine the amount of desired profit from the production and sale of 10,000 cell phones. 360,000 b. Determine the product cost per unit for the production of 10,000 cell phones. per unit c. Determine the product cost markup percentage 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 325 per unit Feedback Check My Work a. Multiply the desired profit percentage by the desired amount (invested assets). b. Divide the total manufacturing (variable and fixed) costs by the number of units produced. c. Divide the desired profit plus the total selling and administrative expenses by the total manufacturing cost. Addo-ILT --d----...-I-I ILI