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Voice Com, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,840 cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $76 Factory overhead $199,800 Direct labor 34 Selling and administrative expenses 69,900 Factory overhead 22 Selling and administrative expenses 23 Total variable cost per unit $155 Voice Com desires a profit equal to a 16% rate of return on invested assets of $599,700. a. Determine the amount of desired profit from the production and sale of 4,840 cell phones. b. Determine the product cost per unit for the production of 4,840 of cell phones. Round your answer to the nearest whole dollar. per unit c. Determine the product cost markup percentage for cell phones. Round your answer to two decimal places. %

Voice Com, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,840 cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $76 Factory overhead $199,800 Direct labor 34 Selling and administrative expenses 69,900 Factory overhead 22 Selling and administrative expenses 23 Total variable cost per unit $155 Voice Com desires a profit equal to a 16% rate of return on invested assets of $599,700. a. Determine the amount of desired profit from the production and sale of 4,840 cell phones. b. Determine the product cost per unit for the production of 4,840 of cell phones. Round your answer to the nearest whole dollar. per unit c. Determine the product cost markup percentage for cell phones. Round your answer to two decimal places. %

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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Diff Analysis & Product Pricing:

Product Cost Method of Product Costing Voice Com, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,840 cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $76 Factory overhead $199,800 Direct labor 34 Selling and administrative expenses 69,900 Factory overhead 22 Selling and administrative expenses 23 Total variable cost per unit $155 Voice Com desires a profit equal to a 16% rate of return on invested assets of $599,700. a. Determine the amount of desired profit from the production and sale of 4,840 cell phones. $4 b. Determine the product cost per unit for the production of 4,840 of cell phones. Round your answer to the nearest whole dollar. $4 per unit c. Determine the product cost markup percentage for cell phones. Round your answer to two decimal places. % d. Determine the selling price of cell phones. Round your answers to the nearest whole dollar. Total Cost per unit Markup per unit Selling price per unit
Transcribed Image Text:Product Cost Method of Product Costing Voice Com, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,840 cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $76 Factory overhead $199,800 Direct labor 34 Selling and administrative expenses 69,900 Factory overhead 22 Selling and administrative expenses 23 Total variable cost per unit $155 Voice Com desires a profit equal to a 16% rate of return on invested assets of $599,700. a. Determine the amount of desired profit from the production and sale of 4,840 cell phones. $4 b. Determine the product cost per unit for the production of 4,840 of cell phones. Round your answer to the nearest whole dollar. $4 per unit c. Determine the product cost markup percentage for cell phones. Round your answer to two decimal places. % d. Determine the selling price of cell phones. Round your answers to the nearest whole dollar. Total Cost per unit Markup per unit Selling price per unit
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