On September 21, 2018, Apple released its iPhone XS at a  retail price of $1,099. An October 13, 2018, article published in The Wall Street Journal estimated that the  cost of materials required to produce the phone totaled $390.

Required

a. What percentage of the retail price is accounted for by the cost of materials?

b. What is the markup dollar amount on the phone?

c. What is the markup percentage on the phone?

d. Estimates for the company’s original iWatch place materials cost at 23.3% of the retail price. If  Apple had wanted to maintain that same relationship between materials cost and retail price for the  iPhone XS, what price would Apple have set for the phone? What markup percentage would have  yielded this price?

e. Why do you think Apple chose to use a higher markup percentage for the Apple Watch than for the iPhone XS?