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 10,000 units of cell phones are as follows:

Variable costs per unit:						Fixed costs:
	Direct materials		$150				Factory overhead	$350,000
	Direct labor		25				Selling and administrative expenses	140,000
	Factory overhead		40
	Selling and administrative expenses		25
		Total variable cost per unit	$240

Smart Stream desires a profit equal to a 30% return on invested assets of $1,200,000.

a. Determine the total costs and the total cost amount per unit for the production and sale of 10,000 cellular phones.

Total cost	$fill in the blank 1
Total cost amount per unit	$fill in the blank 2

b. Determine the total cost markup percentage for cellular phones. Round your answer to two decimal places. fill in the blank 3 %

c. Determine the selling price of cellular phones. Round to the nearest whole dollar. $fill in the blank 4 per cellular phone