a. Determine the total cost and the total cost amount per unit for the production and sale of 6,000 units of cellular phones. Round the cost per unit to two decimal places. Total cost Total cost amount per unit b. Determine the total cost markup percentage (rounded to two decimal places) for cellular phones. 44 X % 1,128,000 X 188 X c. Determine the selling price of cellular phones. Round to the nearest cent. $ 270.72 X per cellular phone

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 6,000 units of cell phones
are as follows:
Variable costs:
Direct materials
Direct labor
$ 94 per unit
43
Total cost
28
23
Factory overhead
Selling and administrative expenses
Total variable cost per unit
$188 per unit
Smart Stream desires a profit equal to a 16% return on invested assets of $718,200.
a. Determine the total cost and the total cost amount per unit for the production and sale of 6,000 units of cellular phones. Round the cost per unit to two decimal
places.
1,128,000 X
Fixed costs:
Factory overhead
Selling and administrative expenses
188 X
Total cost amount per unit
b. Determine the total cost markup percentage (rounded to two decimal places) for cellular phones.
44 X %
$284,200
99,800
c. Determine the selling price of cellular phones. Round to the nearest cent.
$ 270.72 X per cellular phone
Transcribed Image Text: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 6,000 units of cell phones are as follows: Variable costs: Direct materials Direct labor $ 94 per unit 43 Total cost 28 23 Factory overhead Selling and administrative expenses Total variable cost per unit $188 per unit Smart Stream desires a profit equal to a 16% return on invested assets of $718,200. a. Determine the total cost and the total cost amount per unit for the production and sale of 6,000 units of cellular phones. Round the cost per unit to two decimal places. 1,128,000 X Fixed costs: Factory overhead Selling and administrative expenses 188 X Total cost amount per unit b. Determine the total cost markup percentage (rounded to two decimal places) for cellular phones. 44 X % $284,200 99,800 c. Determine the selling price of cellular phones. Round to the nearest cent. $ 270.72 X per cellular phone
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