Reference no: EM132975259
Question - MyPhone, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 5,150 units of cell phones are as follows:
Variable costs: Fixed costs:
Direct materials $72 per unit Factory overhead $200,600
Direct labor 38 Selling and admin. exp. 68,200
Factory overhead 27
Selling and admin. exp. 19
Total variable cost per unit $156 per unit
MyPhone desires a profit equal to a 14% rate of return on invested assets of $602,000.
Required -
a. Determine the amount of desired profit from the production and sale of 5,150 units of cell phones.
b. Determine the product cost per unit for the production of 5,150 of cell phones. If required, round your answer to nearest dollar.
c. Determine the product cost markup percentage (rounded to two decimal places) for cell phones.
d. Determine the selling price of cell phones. Round to the nearest dollar.