# Techcom is designing a new smartphone. Each unit of this new phone will require $230 of direct

## Question:

Techcom is designing a new smartphone. Each unit of this new phone will require $230 of direct materials; $10 of direct labor; $22 of variable overhead; $18 of variable selling, general, and administrative costs; $30 of fixed overhead costs; and $10 of fixed selling, general, and administrative costs.

1. Compute the selling price per unit if the company uses the total cost method and plans a markup of 180% of total costs.

2. The company is a price-taker and the expected selling price for this type of phone is $800 per unit. Compute the target cost per unit if the company’s target profit is 60% of expected selling price.

3. Compute the selling price per unit if the company uses the variable cost method and plans a markup of 200% of variable costs.

## Step by Step Answer:

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