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 4,580 cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $79 Factory overhead $201,200 Direct labor 31 Selling and administrative expenses 68,500 Factory overhead 24 Selling and administrative expenses 19 Total variable cost per unit $153 Voice Com desires a profit equal to a 16% rate of return on invested assets of $601,800. a. Determine the amount of desired profit from the production and sale of 4,580 cell phones. b. Determine the product cost per unit for the production of 4,580 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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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 4,580 cell phones are as follows:
Variable costs per unit:
Fixed costs:
Direct materials
$79
Factory overhead
$201,200
Direct labor
31
Selling and administrative expenses
68,500
Factory overhead
24
Selling and administrative expenses
19
Total variable cost per unit
$153
Voice Com desires a profit equal to a 16% rate of return on invested assets of
$601,800.
a. Determine the amount of desired profit from the production and sale of 4,580
cell phones.
b. Determine the product cost per unit for the production of 4,580 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
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 4,580 cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $79 Factory overhead $201,200 Direct labor 31 Selling and administrative expenses 68,500 Factory overhead 24 Selling and administrative expenses 19 Total variable cost per unit $153 Voice Com desires a profit equal to a 16% rate of return on invested assets of $601,800. a. Determine the amount of desired profit from the production and sale of 4,580 cell phones. b. Determine the product cost per unit for the production of 4,580 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
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