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Product Cost Concept of Product Costing

Voice Com, Inc., uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 5,130 units of cellular phones are as follows:

Variable costs:						Fixed costs:
	Direct materials		$68	per unit			Factory overhead	$201,300
	Direct labor		33				Selling and admin. exp.	68,100
	Factory overhead		23
	Selling and admin. exp.		22
		Total	$146	per unit

Voice Com desires a profit equal to a 14% rate of return on invested assets of $600,600.

a. Determine the amount of desired profit from the production and sale of 5,130 units of cellular phones. $

b. Determine the cost amount per unit for the production of 5,130 units of cellular phones. If required, round your answer to nearest dollar. $ per unit

c. Determine the product cost markup percentage (rounded to two decimal places) for cellular phones. %

d. Determine the selling price of cellular phones. Round to the nearest dollar.

Cost	$per unit
Markup	$per unit
Selling price	$per unit