Product Cost Concept of Product Costing MyPhone, Inc., uses the product cost con

Question

Product Cost Concept of Product Costing

MyPhone, Inc., uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,640 units of cellular phones are as follows:

Variable costs: Fixed costs:

Direct materials $61 per unit Factory overhead $199,900

Direct labor 36 Selling and admin. exp. 69,700

Factory overhead 23

Selling and admin. exp. 20

Total $140 per unit

MyPhone desires a profit equal to a 16% rate of return on invested assets of $600,300.

a. Determine the amount of desired profit from the production and sale of 4,640 units of cellular phones.

$ 96,048

b. Determine the cost amount per unit for the production of 4,640 units of cellular phones. If required, round your answer to nearest dollar.

$ 163 per unit

c. Determine the product cost markup percentage (rounded to two decimal places) for cellular phones. %

d. Determine the selling price of cellular phones. Round to the nearest dollar.

Cost $ per unit

Markup $ per unit

Selling price $ per unit

Really need help finding the answer to Part C and D. Part D has (3) parts.

Explanation / Answer

WORKSHEET FOR COST OF PRODUCION AND SALE OF 4640 UNITS: Total Cost Unit Cost Variable cost: Direct materials $      283,040 $         61.00 Direct labor $      167,040 $         36.00 Factory overhead $      106,720 $         23.00 Selling and adminisrative expenses $         92,800 $         20.00 Variable cost $      649,600 $       140.00 Fixed costs: Factory overhead $      199,900 $         43.08 Selling and adminisrative expenses $         69,700 $         15.02 $      919,200 $       198.10 Desired profit = 600300*16% = $         96,048 Cost amount per unit of production = $         163.08 Cost amount per unit of production and sale $         198.10 Product cost mark up percentage = Desired profit/Total cost of production and sale = 96048/919200 = 10.45% Cost per unit (for production and sale) $         198.10 Mark up per unit $           20.70 Selling price per unit $         218.80 Note: For fixing selling price with mark up on cost, the cost of production and sale is relevant.

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