Total Cost Method of Product Pricing

Smart Stream Inc. uses the total cost method of applying the cost$-$plus approach to product pricing. The costs of producing and selling $6,500$ units of cell phones are as follows:

Variable costs per unit:

Direct materials

Direct labor

Factory overhead

Selling and administrative expenses

Total variable cost per unit

Fixed costs:

$$84$

$39$

$25$

$20$

$$168$

$$274,200$

$96,300$

Smart Stream desires a profit equal to a $14\%$ return on invested assets of $$793,930.$

a$.$ Determine the total costs and the total cost amount per unit for the production and sale of $6,500$ cellular phones. Round the cost per unit to two decimal places.

Total cost

Total cost amount per unit

$

$x$

$

b$.$ Determine the total cost markup percentage for cellular phones. Round your answer to two decimal places. $\%$

c$.$ Determine the selling price of cellular phones. Round to the nearest cent.

$ per cellular phone