Question

Voice Com, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,530 units of cell phones are as follows:

Variable costs:						Fixed costs:
	Direct materials		$62	per unit			Factory overhead	$199,900
	Direct labor		40				Selling and admin. exp.	71,500
	Factory overhead		26
	Selling and admin. exp.		23
		Total variable cost per unit	$151	per unit

Voice Com desires a profit equal to a 15% rate of return on invested assets of $599,900.

a. Determine the amount of desired profit from the production and sale of 4,530 units of cell phones.
$

b. Determine the product cost per unit for the production of 4,530 of cell phones. If required, round your answer to nearest dollar.
$ per unit

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.

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

Answer 1

Answer:- invested axels Amount of desired profit Rate of relurn x 1440 1546. x $ 599,900 = $ 89,985 Product cost per uut Direct materice $62- $40 Direct labour = variable Factory $26 = Overhead Fixed faclony Overhead = $ 44 / $ 199,900 4530 units Product cost per unit - $172 per unit (0) Product cost markup percentage! Voollable selling and administration Lost (04530x$23) = $ 104,190 Fixed selling and administration cost $4,500 desired profit = $89965 Total cost $265675 Total product cost = u530x $ = $ 779 160

product cost moorkeep percentage = Tola Total cost product cost = $265,675 - xloo $779,160 = 34.68% = O per unit amount COSE (A) $172 mark up (192x 34.10%) = $59 selling price = $23/ = * =