Variable Cost Concept of Product Pricing Smart Stream Inc. uses the variable cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,000 cellular phones are as follows: Variable costs: Fixed costs: Direct materials $95 Factory overhead $218,600 Direct labor 44 Selling and administrative expenses 76,850 Factory overhead 29 Selling and administrative expenses 22 Total $190 Smart Stream wants a profit equal to a 15% rate of return on invested assets of $665,000. a. Determine the variable costs and the variable cost amount per unit for the production and sale of 4,000 cellular phones. Total variable costs Variable cost amount per unit 760,000 190 b. Determine the variable cost markup percentage for cellular phones. 35 % c. Determine the selling price of cellular phones. Round to the nearest cent. 219 per cellular phone