Question
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
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 5,320 cell phones are as follows:
Variable costs per unit: | Fixed costs: | |||||||
Direct materials | $76 | Factory overhead | $199,000 | |||||
Direct labor | 30 | Selling and administrative expenses | 69,100 | |||||
Factory overhead | 22 | |||||||
Selling and administrative expenses | 18 | |||||||
Total variable cost per unit | $146 |
Voice Com desires a profit equal to a 15% rate of return on invested assets of $601,500.
a. Determine the amount of desired profit from the production and sale of 5,320 cell phones. $
b. Determine the product cost per unit for the production of 5,320 of cell phones. Round your answer to the nearest whole dollar. $ per unit
c. Determine the product cost markup percentage for cell phones. Round your answer to two decimal places. %
d. Determine the selling price of cell phones. Round your answers to the nearest whole dollar.
Total Cost | $per unit |
Markup | per unit |
Selling price | $per unit |
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