Product Cost Method of Product Costing MyPhone, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,950 cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $70 Factory overhead $199,700 Direct labor 35 Selling and administrative expenses 69,300 Factory overhead 27 Selling and administrative expenses 21 Total variable cost per unit $153 MyPhone desires a profit equal to a 15% rate of return on invested assets of $598,500. a. Determine the amount of desired profit from the production and sale of 4,950 cell phones. b. Determine the product cost per unit for the production of 4,950 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. 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

Product Cost Method of Product Costing MyPhone, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,950 cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $70 Factory overhead $199,700 Direct labor 35 Selling and administrative expenses 69,300 Factory overhead 27 Selling and administrative expenses 21 Total variable cost per unit $153 MyPhone desires a profit equal to a 15% rate of return on invested assets of $598,500. a. Determine the amount of desired profit from the production and sale of 4,950 cell phones. b. Determine the product cost per unit for the production of 4,950 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. 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

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 17E: Product cost method of product costing Smart Stream Inc. uses the product cost method of applying...

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Total cost method of product pricing Based on the data presented in Exercise 17, assume that Smart Stream Inc. uses the total cost method of applying the cost-plus approach to product pricing. A. Determine the total costs and the total cost amount per unit for the production and sale of 10,000 cellular phones. B. Determine the total cost markup percentage (rounded to two decimal places) for cellular phones. C. Determine the selling price of cellular phones. (Round markup to the nearest dollar.)
Grand Canyon Manufacturing Inc. produces and sells a product with a price of 100 per unit. The following cost data have been prepared for its estimated upper and lower limits of activity: Overhead: Selling and administrative expenses: Required: 1. Classify each cost element as either variable, fixed, or semi-variable. (Hint: Recall that variable expenses must go up in direct proportion to changes in the volume of activity.) 2. Calculate the break-even point in units and dollars. (Hint: First use the high-low method illustrated in Chapter 4 to separate costs into their fixed and variable components.) 3. Prepare a break-even chart. 4. Prepare a contribution income statement, similar in format to the statement appearing on page 540, assuming sales of 5,000 units. 5. Recompute the break-even point in units, assuming that variable costs increase by 20% and fixed costs are reduced by 50,000.
Grainger Company produces only one product and sells that product for $100 per unit. Cost information for the product is: Selling expenses are $4 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 5,000 units; sold 4,000; and had no beginning inventory. A. Compute net income under absorption costing variable costing B. Reconcile the difference between the income under absorption and variable costing.
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