Question

Variable Cost Concept of Product Pricing Voice Com, Inc., produces and sells cellular phones. The costs of producing and selling 8,500 units of cellular phones are a Variable costs: Fixed costs: Direct materials $ 65 per unit Factory overhead $382,900 Selling and admin. exp. Direct labor 30 134,500 Factory overhead 20 Selling and admin. exp 15 $130 per unit Total Voice Com desires a profit equal to a 15% rate of return on invested assets of $455,000 Assume that Voice Com, Inc., uses the variable cost concept of applying the cost-plus approach to product pricing a. Determine the variable costs and the variable cost amount per unit for the production and sale of 8,500 units of cellula Total variable costs Variable cost amount per unit b. Determine the variable cost markup percentage for cellular phones. c. Determine the selling price of cellular phones. Round to the nearest cent. per phone

Answer 1

Desired Profit	68,250
Variable costs	1,105,000
Variable cost per unit	130
b.Variable cost markup %	53.00%
c.Selling price = Variable cost + mark up
198.90	per phone

А 1 Desired Profit =455000* 15% 2 Variable costs =B3*8500 3 Variable cost per unit 130 4. 5 b.Variable cost markup % =(382900+134500+B1)/B2 6 7 c.Selling price = Variable cost + mark up 8 =B3+B5*B3 Iper phone