pring 2018 CO. Cengage CengageNOWv2 | Online teaching and learning resource from
ID: 2519167 • Letter: P
Question
pring 2018 CO. Cengage CengageNOWv2 | Online teaching and learning resource from Ce MyPhone, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 5,000 units of cell phones are as follows: Variable costs Fixed costs: Direct materials Direct labor Factory overhead Selling and admin. exp $70 per unit Factory overhead $201,000 Selling and admin. exp. 36 24 21 71,500 Total variable cost per unit $151 per unit MyPhone desires a profit equal to a 15% rate of return on invested assets of $598,800. a. Determine the amount of desired profit from the production and sale of 5,000 units of cell phones. Determine the product cost per unit for the production of s,000 of cel phones. If required, round your answer to nearest dollar per unlt 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 Markup Selling price per unit per unit per unit Previous Next ? | Check My WorkExplanation / Answer
Total Cost = Variable Cost + Fixed Cost
Total Cost of 5000 Units = [(151*5000) + 272500 ]
= $ 1027500
Cost Per Unit = 1027500/5000 = $ 205.5 per unit
Desired Profit = 15% of 598800 = $ 89820
Desired Profit Per Unit = 89820/5000 = $ 17.96 per unit
Desired Selling Price Per Unit = (1027500 + 89820)/5000 = $ 223.46
Product Cost Markup Percentege: (17.96/205.5)*100 = 8.74%
Answer:
a) $ 89820
b) $ 205.5
c) 8.74%
d) Cost Per Unit = $ 205.5
Markup Per Unit = $ 17.96
Selling Price Per Unit = $ 223.46
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.