Problem 23-4B Pricing using total cost, target cost, and variable cost P6

ComPro is designing a new smartphone. Each unit of this new phone will require $285 of direct materials; $10 of direct labor; $30 of variable overhead; $5 of variable selling, general, and administrative costs; $14 of fixed overhead costs; and $16 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 220% of total costs.

2. The company is a price-taker and the expected selling price for this type of phone is $1,000 per unit. Compute the target cost per unit if the companys 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 250% of variable costs.