Voice Com Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,690 cellular phones are as follows: Variable costs: Fixed costs: Direct materials $75 per unit Factory overhead $199,100 Direct labor 33 Selling and administrative expenses 68,700 Factory overhead 28 Selling and administrative expenses 21
Product Cost Concept of Product Costing
Voice Com Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,690 cellular phones are as follows:
| Variable costs: | Fixed costs: | ||||||
| Direct materials | $75 | per unit | Factory overhead | $199,100 | |||
| Direct labor | 33 | Selling and administrative expenses | 68,700 | ||||
| Factory overhead | 28 | ||||||
| Selling and administrative expenses | 21 | ||||||
| Total | $157 | per unit |
Voice Com wants a profit equal to a 14%
a. Determine the amount of desired profit from the production and sale of 4,690 cellular phones.
$fill in the blank 1
b. Determine the product cost and the cost amount per unit for the production of 4,690 cellular phones. If required, round your answer to nearest dollar.
$fill in the blank 2 per unit
c. Determine the product cost markup percentage (rounded to two decimal places) for cellular phones.
fill in the blank 3 %
d. Determine the selling price of cellular phones. Round to the nearest dollar.
| Cost | $fill in the blank 4 | per unit |
| Markup | fill in the blank 5 | |
| Selling price | $fill in the blank 6 | per unit |
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