Reference no: EM132946869
Question - Using the Total Cost Method of Product Pricing Smart Stream Inc. uses the total cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 5,000 units of cell phones are as follows:
Variable costs per unit:
Direct materials $85
Direct labor $39
Factory Overhead $26
Selling and administrative expenses $20
Total variable cost per unit $170
Fixed Costs:
Factory overhead $214,600
Selling and administrative expenses $75,400
Smart Stream desires a profit equal to a 15% return on invested assets of $623,200.
a. Determine the total costs and the total cost amount per unit for the production and sale of 5,000 cellular phones.
b. Determine the total cost markup percentage for cellular phones.
c. Determine the selling price of cellular phones.
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