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Variable Cost Concept of Product Pricing Voice Com, Inc., produces and sells cellular phones. The costs of producing and selling 6,500 units of cellular phones are as follows: Variable costs: Fixed costs: Direct materials Direct labor Factory overhead Selling and admin. exp. Total $90 per unit 41 Total variable costs 27 22 $180 per unit Voice Com desires a profit equal to a 15% rate of return on invested assets of $630,000. Assume that Voice Com, Inc., uses the variable cost concept of applying the cost-plus approach to product pricing. a. Determine the variable costs and the variable cost amount per unit for the production and sale of 6,500 units of cellular phones. $ Factory overhead Selling and admin. exp. 12 $ Variable cost amount per unit b. Determine the variable cost markup percentage for cellular phones. $337,000 118,400 c. Determine the selling price of cellular phones. Round to the nearest cent. per phone.

Variable Cost Concept of Product Pricing Voice Com, Inc., produces and sells cellular phones. The costs of producing and selling 6,500 units of cellular phones are as follows: Variable costs: Fixed costs: Direct materials Direct labor Factory overhead Selling and admin. exp. Total $90 per unit 41 Total variable costs 27 22 $180 per unit Voice Com desires a profit equal to a 15% rate of return on invested assets of $630,000. Assume that Voice Com, Inc., uses the variable cost concept of applying the cost-plus approach to product pricing. a. Determine the variable costs and the variable cost amount per unit for the production and sale of 6,500 units of cellular phones. $ Factory overhead Selling and admin. exp. 12 $ Variable cost amount per unit b. Determine the variable cost markup percentage for cellular phones. $337,000 118,400 c. Determine the selling price of cellular phones. Round to the nearest cent. per phone.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variable Cost Concept of Product Pricing Voice Com, Inc., produces and sells cellular phones. The costs of producing and selling 6,500 units of cellular phones are as follows: Variable costs: Direct materials Direct labor Factory overhead Selling and admin. exp. Total $90 per unit 41 Total variable costs 27 22 $ Fixed costs: $180 per unit Voice Com desires a profit equal to a 15% rate of return on invested assets of $630,000. Assume that Voice Com, Inc., uses the variable cost concept of applying the cost-plus approach to product pricing. a. Determine the variable costs and the variable cost amount per unit for the production and sale of 6,500 units of cellular phones. 18 Factory overhead Selling and admin. exp. Variable cost amount per unit b. Determine the variable cost markup percentage for cellular phones. $337,000 118,400 c. Determine the selling price of cellular phones. Round to the nearest cent. $ per phone
Transcribed Image Text:Variable Cost Concept of Product Pricing Voice Com, Inc., produces and sells cellular phones. The costs of producing and selling 6,500 units of cellular phones are as follows: Variable costs: Direct materials Direct labor Factory overhead Selling and admin. exp. Total $90 per unit 41 Total variable costs 27 22 $ Fixed costs: $180 per unit Voice Com desires a profit equal to a 15% rate of return on invested assets of $630,000. Assume that Voice Com, Inc., uses the variable cost concept of applying the cost-plus approach to product pricing. a. Determine the variable costs and the variable cost amount per unit for the production and sale of 6,500 units of cellular phones. 18 Factory overhead Selling and admin. exp. Variable cost amount per unit b. Determine the variable cost markup percentage for cellular phones. $337,000 118,400 c. Determine the selling price of cellular phones. Round to the nearest cent. $ per phone
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