MyPhone, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,870 units of cell phones are as follows: Variable costs: Fixed costs: Direct materials $64 per unit Factory overhead $198,100 Direct labor 32 Selling and admin. exp. 71,000 Factory overhead 22 Selling and admin. exp. 19 Total variable cost per unit $137 per unit MyPhone desires a profit equal to a 13% rate of return on invested assets of $601,800. a. Determine the amount of desired profit from the production and sale of 4,870 units of cell phones. b. Determine the product cost per unit for the production of 4,870 of cell phones. If required, round your answer to nearest dollar. 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
MyPhone, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,870 units of cell phones are as follows: Variable costs: Fixed costs: Direct materials $64 per unit Factory overhead $198,100 Direct labor 32 Selling and admin. exp. 71,000 Factory overhead 22 Selling and admin. exp. 19 Total variable cost per unit $137 per unit MyPhone desires a profit equal to a 13% rate of return on invested assets of $601,800. a. Determine the amount of desired profit from the production and sale of 4,870 units of cell phones. b. Determine the product cost per unit for the production of 4,870 of cell phones. If required, round your answer to nearest dollar. 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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MyPhone, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,870 units of cell phones are as follows:
| Variable costs: | Fixed costs: | ||||||
| Direct materials | $64 | per unit | Factory |
$198,100 | |||
| Direct labor | 32 | Selling and admin. exp. | 71,000 | ||||
| Factory overhead | 22 | ||||||
| Selling and admin. exp. | 19 | ||||||
| Total variable cost per unit | $137 | per unit |
MyPhone desires a profit equal to a 13%
a. Determine the amount of desired profit from the production and sale of 4,870 units of cell phones.
b. Determine the product cost per unit for the production of 4,870 of cell phones. If required, round your answer to nearest dollar.
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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