Total Cost Method of Product Pricing Smart Stream Inc. uses the total cost method of...
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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 10,000 units of cell phones are as follows: Fixed costs: Variable costs per unit: Direct materials $150 Factory overhead $350,000 Direct labor Selling and administrative expenses 140,000 40 Factory overhead Selling and administrative expenses Total variable cost per unit 25 $240 Smart Stream desires a profit equal to a 30% return on invested assets of $1,200,000. a. Determine the total costs and the total cost amount per unit for the production and sale of 10,000 cellular phones. Total cost $ $ 2,400,000 x 289 Total cost amount per unit b. Determine the total cost markup percentage for cellular phones. Round your answer to two decimal places. 35.42 x % c. Determine the selling price of cellular phones. Round to the nearest whole dollar. $ 325 per cellular phone
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