Question

Voice Com, Inc., uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 5,070 units of cell phones are as follows:

Variable costs:						Fixed costs:
	Direct materials		$89	per unit			Factory overhead	$198,300
	Direct labor		33				Selling and admin. exp.	71,800
	Factory overhead		27
	Selling and admin. exp.		22
		Total variable cost per unit	$171	per unit

Voice Com desires a profit equal to a 14% rate of return on invested assets of $598,500.

a. Determine the amount of desired profit from the production and sale of 5,070 units of cell phones.
$

b. Determine the product cost per unit for the production of 5,070 of cell phones. If required, round your answer to nearest dollar.
$ per unit

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.

Cost: $____per unit

Markup $____per unit

Selling price $_____per unit