Variable Cost Method of Product Pricing Smart Stream Inc. uses the variable cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $150 Factory overhead $350,000 Direct labor 25 Selling and admin. exp. 140,000 Factory overhead 40 Selling and administrative expenses 25 Total variable cost per unit $240 Smart Stream desires a profit equal to a 30% return on invested assets of $1,200,000. a. Determine the variable costs and the variable cost amount per unit for the production and sale of 10,000 cellular phones. Total variable cost $ Variable cost amount per unit $ b. Determine the variable cost markup percentage for cellular phones. Round to two decimal places. % c. Determine the selling price of cellular phones. If required, round to the nearest dollar. $ per cellular phone