Textbook Problem

Variable cost method of product pricing

Based on the data presented in Exercise 17, assume that Smart Stream Inc. uses the variable cost method of applying the cost-plus approach to product pricing.

1. A. Determine the variable costs and the variable cost amount per unit for the production and sale of 10,000 cellular phones.
2. B. Determine the variable cost markup percentage (rounded to two decimal places) for cellular phones.
3. C. Determine the selling price of cellular phones. (Round markup to the nearest dollar.)