Voice Com Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,620 cellular phones are as follows: Variable costs: Fixed costs: Direct materials $89 per unit Factory overhead $201,000 Direct labor 36 Selling and administrative expenses 68,600 Factory overhead 28 Selling and administrative expenses 18 Total $171 per unit Voice Com wants a profit equal to a 14% rate of return on invested assets of $599,500. a. Determine the amount of desired profit from the production and sale of 4,620 cellular phones. 83,930 b. Determine the product cost and the cost amount per unit for the production of 4,620 cellular phones. If required, round your answer to nearest dollar. 200 X per unit c. Determine the product cost markup percentage (rounded to two decimal places) for cellular phones. 25.57 X % d. Determine the selling price of cellular phones. Round to the nearest dollar. Cost 200 X per unit Markup 51 Selling price 251 X per unit
Voice Com Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,620 cellular phones are as follows: Variable costs: Fixed costs: Direct materials $89 per unit Factory overhead $201,000 Direct labor 36 Selling and administrative expenses 68,600 Factory overhead 28 Selling and administrative expenses 18 Total $171 per unit Voice Com wants a profit equal to a 14% rate of return on invested assets of $599,500. a. Determine the amount of desired profit from the production and sale of 4,620 cellular phones. 83,930 b. Determine the product cost and the cost amount per unit for the production of 4,620 cellular phones. If required, round your answer to nearest dollar. 200 X per unit c. Determine the product cost markup percentage (rounded to two decimal places) for cellular phones. 25.57 X % d. Determine the selling price of cellular phones. Round to the nearest dollar. Cost 200 X per unit Markup 51 Selling price 251 X per unit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Product Cost Concept of Product Costing
Voice Com Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,620 cellular phones are as
follows:
Variable costs:
Fixed costs:
Direct materials
$89 per unit
Factory overhead
$201,000
Direct labor
36
Selling and administrative expenses
68,600
Factory overhead
28
Selling and administrative expenses
18
Total
$171 per unit
Voice Com wants a profit equal to a 14% rate of return on invested assets of $599,500.
a. Determine the amount of desired profit from the production and sale of 4,620 cellular phones.
$
83,930
b. Determine the product cost and the cost amount per unit for the production of 4,620 cellular phones. If required, round your answer to nearest dollar.
$
200
per unit
c. Determine the product cost markup percentage (rounded to two decimal places) for cellular phones.
25.57
X %
d. Determine the selling price of cellular phones. Round to the nearest dollar.
Cost
200 X per unit
Markup
51
Selling price $
251
per unit
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