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Product Cost Method of Product Costing Voice Com, Inc., uses the product cost method of...

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Accounting

  1. Product Cost Method of Product Costing

    Voice Com, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 5,250 units of cell phones are as follows:

    Variable costs: Fixed costs:
    Direct materials $89 per unit Factory overhead $200,400
    Direct labor 30 Selling and admin. exp. 70,800
    Factory overhead 26
    Selling and admin. exp. 20
    Total variable cost per unit $165 per unit

    Voice Com desires a profit equal to a 16% rate of return on invested assets of $601,300.

    a. Determine the amount of desired profit from the production and sale of 5,250 units of cell phones. $

    b. Determine the product cost per unit for the production of 5,250 of cell phones. If required, round your answer to nearest dollar. $ per unit

    c. Determine the product cost markup percentage (rounded to two decimal places) for cell phones. %

    d. Determine the selling price of cell phones. Round to the nearest dollar.

    Total Cost $per unit
    Markup per unit
    Selling price $per unit

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