Product Cost Methodof 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 4,800 units of cell phones are as follows:

Voice Com desires a profit equal to a 13% rate of return on invested assets of $598,100.

Variable costs: Fixed costs:

Direct materials -- $64 per unit Factory overhead $199,600

Direct labor-- 33 Selling and admin. exp. 71,500

Factory overhead -- 23

Selling and admin. exp.-- 20

Total variable cost per unit- $140 per unit

a.Determine the amount of desired profit from the production and sale of 4,800 units of cell phones.

$__________

b.Determine the product cost per unit for the production of 4,800 of cell phones. If required, round your answer to nearest dollar.

____________$per unit

c.Determine the product cost markup percentage (rounded to two decimal places) 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 $_______per unit