Product Cost Method of Product Costing

Voice Com, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 5,500 units of cell phones are as follows:

Variable costs:						Fixed costs:
	Direct materials		$69	per unit			Factory overhead	$200,800
	Direct labor		31				Selling and admin. exp.	68,100
	Factory overhead		22
	Selling and admin. exp.		20
		Total variable cost per unit	$142	per unit

Voice Com desires a profit equal to a 15% rate of return on invested assets of $601,800.

a. Determine the amount of desired profit from the production and sale of 5,500 units of cell phones. $fill in the blank 1

b. Determine the product cost per unit for the production of 5,500 of cell phones. If required, round your answer to nearest dollar. $fill in the blank 2 per unit

c. Determine the product cost markup percentage (rounded to two decimal places) for cell phones. fill in the blank 3 %

d. Determine the selling price of cell phones. Round to the nearest dollar.

Total Cost	$fill in the blank 4per unit
Markup	fill in the blank 5per unit
Selling price	$fill in the blank 6per unit