Total Cost Method of Product Pricing Smart Stream Inc. uses the total cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 units of cell phones...

Total Cost Method of Product Pricing

Smart Stream Inc. uses the total cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 units of cell phones are as follows:

Variable costs per unit:				Fixed costs:
	Direct materials	$150			Factory overhead	$350,000
	Direct labor	25			Selling and administrative expenses	140,000
	Factory overhead	40
	Selling and administrative expenses	25
		Total variable cost per unit	$240

Smart Stream desires a profit equal to a 30% return on invested assets of $1,200,000.

a.Determine the total costs and the total cost amount per unit for the production and sale of 10,000 cellular phones.

Total cost	$fill in the blank 1
Total cost amount per unit	$fill in the blank 2

b.Determine the total cost markup percentage for cellular phones.
Round your answer to two decimal places.

fill in the blank 3 %

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

$fill in the blank 4 per cellular phone

Jun 03, 2022

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Total Cost Method of Product Pricing Smart Stream Inc. uses the total cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 units of cell phones...

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