Voice Com, Inc., uses the product cost concept of applying the cost-plus approach to product pricing. The

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Voice Com, Inc., uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 5,260 units of cellular phones are as follows: Variable costs: Fixed costs: Direct materials $62 per unit Factory overhead $200,600 Direct labor 35 Selling and admin. exp. 72,000 Factory overhead 25 Selling and admin. exp. 18 Total $140 per unit Voice Com desires a profit equal to a 15% rate of return on invested assets of $600,300.

a. Determine the amount of desired profit from the production and sale of 5,260 units of cellular phones. $

b. Determine the cost amount per unit for the production of 5,260 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

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Financial and Managerial Accounting Using Excel for Success

ISBN: 978-1111993979

1st edition

Authors: James Reeve, Carl S. Warren, Jonathan Duchac

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