Voice Com, Inc., produces and sells cellular phones. The costs of producing and selling 5,000 units of
Question:
Voice Com, Inc., produces and sells cellular phones. The costs of producing and selling 5,000 units of cellular phones are as follows:
Variable costs: | Fixed costs: | |||
Direct materials | $ 94 | per unit | Factory overhead | $236,800 |
Direct labor | 43 | Selling and admin. exp. | 83,200 | |
Factory overhead | 28 | |||
Selling and admin. exp. | 23 | |||
Total | $188 | per unit |
Voice Com desires a profit equal to a 15% rate of return on invested assets of $638,400.
Assume that Voice Com, Inc., uses the total cost concept of applying the cost-plus approach to product pricing.
a. Determine the total costs and the total cost amount per unit for the production and sale of 5,000 units of cellular phones. Round the cost per unit to two decimal places.
Total cost | $ |
Cost amount per unit | $ |
b. Determine the total cost markup percentage (rounded to two decimal places) for cellular phones.
%
c. Determine the selling price of cellular phones. Round to the nearest cent.
$per phone
Financial and Managerial Accounting Using Excel for Success
ISBN: 978-1111993979
1st edition
Authors: James Reeve, Carl S. Warren, Jonathan Duchac