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:

Factory overhead $$350,000$

Selling and administrative expenses $140,000$

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 $10,000$ cell phones.

Total variable costs

Cost amount per unit

b$.$ Determine the variable cost markup percentage for cell phones. Round to two decimal places.

$\%$

c$.$ Determine the selling price of cell phones. If required, round to the nearest dollar.

per cell phone