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Voice Com, Inc., uses the product cost method of applying the cost-plus approach to product...

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Accounting

  1. Voice Com, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,530 units of cell phones are as follows:

    Variable costs: Fixed costs:
    Direct materials $62 per unit Factory overhead $199,900
    Direct labor 40 Selling and admin. exp. 71,500
    Factory overhead 26
    Selling and admin. exp. 23
    Total variable cost per unit $151 per unit

    Voice Com desires a profit equal to a 15% rate of return on invested assets of $599,900.

    a. Determine the amount of desired profit from the production and sale of 4,530 units of cell phones. $

    b. Determine the product cost per unit for the production of 4,530 of cell phones. If required, round your answer to nearest dollar. $ per unit

    c. Determine the product cost markup percentage (rounded to two decimal places) for cell phones. %

    d. Determine the selling price of cell phones. Round to the nearest dollar.

    Total Cost $per unit
    Markup per unit
    Selling price $per unit

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