Question
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
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 9,000 units of cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $ 82 Factory overhead $373,000 Direct labor 38 Selling and administrative expenses 131,000 Factory overhead 25 Selling and administrative expenses 19 Total variable cost per unit $164 Smart Stream desires a profit equal to a 15% return on invested assets of $1,188,000. a. Determine the total costs and the total cost amount per unit for the production and sale of 9,000 cellular phones. Round the cost per unit to two decimal places.
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