Smart Stream Inc. uses the total cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 6,500 units of cellular phones are as follows: Variable costs: Fixed costs: Direct materials $ 85 per unit Factory overhead $279,000 Direct labor 39 Selling and admin. exp. 98,000 Factory overhead 26 Selling and admin. exp. 20 Total $170 per unit Smart Stream wants a profit equal to a 16% rate of return on invested assets of $833,630. a. Determine the total costs and the total cost amount per unit for the production and sale of 6,500 units of cellular phones. Round the cost per unit to two decimal places. Total costs $fill in the blank 1 Cost amount per unit $fill in the blank 2 b. Determine the total cost markup percentage (rounded to two decimal places) for cellular phones. fill in the blank 3% c. Determine the selling price of cellular phones. Round to the nearest cent. $fill in the blank 4per phone
Smart Stream Inc. uses the total cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 6,500 units of cellular phones are as follows: Variable costs: Fixed costs: Direct materials $ 85 per unit Factory overhead $279,000 Direct labor 39 Selling and admin. exp. 98,000 Factory overhead 26 Selling and admin. exp. 20 Total $170 per unit Smart Stream wants a profit equal to a 16% rate of return on invested assets of $833,630. a. Determine the total costs and the total cost amount per unit for the production and sale of 6,500 units of cellular phones. Round the cost per unit to two decimal places. Total costs $fill in the blank 1 Cost amount per unit $fill in the blank 2 b. Determine the total cost markup percentage (rounded to two decimal places) for cellular phones. fill in the blank 3% c. Determine the selling price of cellular phones. Round to the nearest cent. $fill in the blank 4per phone
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Total Cost Concept of Product Pricing
Smart Stream Inc. uses the total cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 6,500 units of cellular phones are as follows:
| Variable costs: | Fixed costs: | |||
| Direct materials | $ 85 | per unit | Factory overhead | $279,000 |
| Direct labor | 39 | Selling and admin. exp. | 98,000 | |
| Factory overhead | 26 | |||
| Selling and admin. exp. | 20 | |||
| Total | $170 | per unit |
Smart Stream wants a profit equal to a 16% rate of
a. Determine the total costs and the total cost amount per unit for the production and sale of 6,500 units of cellular phones. Round the cost per unit to two decimal places.
| Total costs | $fill in the blank 1 |
| Cost amount per unit | $fill in the blank 2 |
b. Determine the total cost markup percentage (rounded to two decimal places) for cellular phones.
fill in the blank 3%
c. Determine the selling price of cellular phones. Round to the nearest cent.
$fill in the blank 4per phone
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education