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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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