Question
Techcom is designing a new smartphone. Each unit of this new phone will require $241 of direct materials; $21 of direct labor; $34 of variable
Techcom is designing a new smartphone. Each unit of this new phone will require $241 of direct materials; $21 of direct labor; $34 of variable overhead; $29 of variable selling, general, and administrative costs; $42 of fixed overhead costs; and $21 of fixed selling, general, and administrative costs. 1. Compute the selling price per unit if the company uses the total cost method and plans a markup of 175% of total costs. 2. The company is a price-taker and the expected selling price for this type of phone is $910 per unit. Compute the target cost per unit if the companys target profit is 60% of expected selling price. 3. Compute the selling price per unit if the company uses the variable cost method and plans a markup of 200% of variable costs.
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