Applokia Limited is a manufacturer of smart phones. The company has the following costs for the month of September:

* These costs remain the same no matter how many or how few smart phones are produced and sold in the month

Required

(a) For the above costs, state whether they are:

• Fixed or variable

• Direct production costs, production overheads or period costs

(b) Draw up a table that summarizes the above costs into prime cost, production cost and total cost.

(c) If Applokia produces 130,000 smart phones in a month and selling price is total cost + 25%, calculate the selling price for each smart phone produced in September.

(d) If rival companies are selling similar products for £27, what margin will Applokia make on its costs per smart phone if it sells its smart phones at the same price as its rivals?

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Factory rent Factory manager's salary Administration salaries Marketing costs Plastic smart phone covers Quality control staff salaries Production line workers' salaries* Chip assemblies for smart phones produced Administration office rent Marketing office rent Factory rates Power for production machinery Factory lighting and heating Administration lighting and heating Marketing lighting and heating Marketing department salaries Batteries Production machinery depreciation* £000 100 38 85 50 250 75 500 1,498 25 20 47 50 43 5 4 51 242 37