Variable Cost Concept of Product Pricing Smart Stream Inc. uses the variable cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,500 units of cellular phones are as follows: Variable costs: Fixed costs: Direct materials $ 90 per unit Factory overhead $223,800 Direct labor 41 Selling and admin. exp. 78,600 Factory overhead 27 Selling and admin. exp. 22 Total $180 per unit Smart Stream wants a profit equal to a 15% rate of return on invested assets of $630,000. a. Determine the variable costs and the variable cost amount per unit for the production and sale of 4,500 units of cellular phones. Round to two decimal places. Total variable costs $fill in the blank 1 Variable cost amount per unit $fill in the blank 2 b. Determine the variable cost markup percentage 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 4 per cellular phone
Variable Cost Concept of Product Pricing Smart Stream Inc. uses the variable cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,500 units of cellular phones are as follows: Variable costs: Fixed costs: Direct materials $ 90 per unit Factory overhead $223,800 Direct labor 41 Selling and admin. exp. 78,600 Factory overhead 27 Selling and admin. exp. 22 Total $180 per unit Smart Stream wants a profit equal to a 15% rate of return on invested assets of $630,000. a. Determine the variable costs and the variable cost amount per unit for the production and sale of 4,500 units of cellular phones. Round to two decimal places. Total variable costs $fill in the blank 1 Variable cost amount per unit $fill in the blank 2 b. Determine the variable cost markup percentage 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 4 per cellular phone
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variable Cost Concept of Product Pricing
Smart Stream Inc. uses the variable cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,500 units of cellular phones are as follows:
| Variable costs: | Fixed costs: | |||
| Direct materials | $ 90 | per unit | Factory |
$223,800 |
| Direct labor | 41 | Selling and admin. exp. | 78,600 | |
| Factory overhead | 27 | |||
| Selling and admin. exp. | 22 | |||
| Total | $180 | per unit |
Smart Stream wants a profit equal to a 15%
a. Determine the variable costs and the variable cost amount per unit for the production and sale of 4,500 units of cellular phones. Round to two decimal places.
| Total variable costs | $fill in the blank 1 |
| Variable cost amount per unit | $fill in the blank 2 |
b. Determine the variable cost markup percentage 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 4 per cellular phone
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