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 4,000 units of cell phones are as follows:

Variable costs per unit:

Line Item Description	Amount
Direct materials	$91
Direct labor	42
Factory overhead	27
Selling and administrative expenses	22
Total variable cost per unit	$182

Fixed costs:

Line Item Description	Amount
Factory overhead	$183,500
Selling and administrative expenses	64,500

Smart Stream desires a profit equal to a 16% return on invested assets of $463,600.

a. Determine the total costs and the total cost amount per unit for the production and sale of 4,000 cell phones. Round the cost per unit to two decimal places.

Line Item Description	Amount
Total cost	fill in the blank 1 of 2$
Total cost amount per unit	fill in the blank 2 of 2$

b. Determine the total cost markup percentage for cell phones. Round your answer to two decimal places. fill in the blank 1 of 1 %

c. Determine the selling price of cell phones. Round to the nearest cent. fill in the blank 1 of 1$ per cell phone