uses theproduct cost conceptof applying the cost-plus approach to product pricing. The costs of producing and selling 5,000 units of cellular phones are as follows: (7 points)

Variable costsFixed Costs:

Direct materials $625,000 Factory overhead $215,000

Direct labor 225,000 Selling & Admin. expenses 75,000

Factory Overhead 200,000

Selling & admin. Exp. 150,000

$1,200,000

RooPhone desires a profit equal to a 25% rate of return on invested assets of $500,000.

Required:

a.) Determine the amount of desired profit.

b.) Determine the product costper unitfor the production of 5,000 phones.

c.) Determine the total cost markup percentage (e.g. 20%) using the product cost concept.

d.) Determine the selling price of each cellular phone. Round to nearest dollar.

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