Question
In: Accounting
MyPhone, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The...
MyPhone, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 5,380 cell phones are as follows:
| Variable costs per unit: | Fixed costs: | |||||||
| Direct materials | $64 | Factory overhead | $198,000 | |||||
| Direct labor | 31 | Selling and administrative expenses | 71,300 | |||||
| Factory overhead | 23 | |||||||
| Selling and administrative expenses | 21 | |||||||
| Total variable cost per unit | $139 | |||||||
MyPhone desires a profit equal to a 16% rate of return on invested assets of $600,700.
a. Determine the amount of desired profit from
the production and sale of 5,380 cell phones.
$
b. Determine the product cost per unit for the
production of 5,380 of cell phones. Round your answer to the
nearest whole dollar.
$ per unit
c. Determine the product cost markup percentage
for cell phones. Round your answer to two decimal places.
%
d. Determine the selling price of cell phones. Round your answers to the nearest whole dollar.
| Total Cost | $per unit |
| Markup | per unit |
| Selling price | $per unit |
Solutions
Expert Solution
Answer a.
The amount of desired profit from the production and sale of 5,380 cell phones = Invested assets * Rate of return
= $600,700 * 16 % = $96,112.
Answer b.
The product cost per unit for the production of 5,380 of cell phones
= Direct materials + Direct labor + Variable Factory overhead + (Fixed Factory overhead / 5,380 units)
= $64 + $31 + $23 + ($198,000 / 5,380 units) = $155.
Answer c.
Total product costs = [(Direct materials + Direct labor + Variable Factory overhead) * 5,380 units] + Fixed Factory overhead
= [($64 + $31 + $23) * 5,380 units] + $198,000
= $832,840.
| Total product costs | $832,840 |
| Add: Selling and administrative expenses | |
| Variable ($21 * 5,380 units) | $112,980 |
| Fixed | $71,300 |
| Add : Desired profit | $96,112 |
| Sales value | $1,113,232 |
Total markup over product costs = $1,113,232 - $832,840 = $280,392
The product cost markup percentage for cell phones = Total markup over product costs / Total product costs
= $280,392 / $832,840 = 33.67 %.
Answer d.
| Total Cost (product cost per unit ) | $155 per unit |
| Markup ($155 * 33.67%) | $52 per unit |
| Selling price | $207 per unit |
ekkarill92 answered 2 years agoRelated Solutions
MyPhone, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The...
MyPhone, Inc. uses the product cost method of applying the
cost-plus approach to product pricing. The costs of producing and
selling 5,380 cell phones are as follows:
Variable costs per unit:
Fixed costs:
Direct materials
$64
Factory overhead
$198,000
Direct labor
31
Selling and administrative expenses
71,300
Factory overhead
23
Selling and administrative expenses
21
Total variable cost per unit
$139
MyPhone desires a profit equal to a 16% rate of return on
invested assets of $600,700.
a. Determine the...
Voice Com, Inc., uses the product cost method of applying the cost-plus approach to product pricing....
Voice Com, Inc., uses the product cost method of applying the
cost-plus approach to product pricing. The costs of producing and
selling 5,010 units of cell phones are as follows:
Variable costs:
Fixed costs:
Direct materials
$62
per unit
Factory overhead
$200,200
Direct labor
38
Selling and admin. exp.
69,900
Factory overhead
26
Selling and admin. exp.
20
Total variable cost per unit
$146
per unit
Voice Com desires a profit equal to a 16% rate of return on
invested...
Smart Stream Inc. uses the total cost method of applying the cost-plus approach to 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 7,500 units of cell phones are as follows:
Variable costs:
Fixed costs:
Direct materials
$ 85
per unit
Factory overhead
$321,900
Direct labor
39
Selling and administrative
expenses
113,100
Factory overhead
26
Selling and administrative
expenses
20
Total
variable cost per unit
$170
per unit
Smart Stream desires a profit equal to a 14% return on invested
assets...
RooPhone Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The...
RooPhone Inc. uses the product cost concept of
applying the cost-plus approach to product pricing. The costs of
producing and selling 5,000 units of cellular phones are as
follows: (7 points)
Variable
costs Fixed
Costs:
Direct materials
$625,000 Factory
overhead $215,000
Direct
labor 225,000 Selling
& Admin.
expenses
75,000
Factory
Overhead
200,000
Selling & admin. Exp. 150,000
$1,200,000
RooPhone desires a profit equal to a 18% rate of return on
invested assets of $550,000.
Required:
a.) Determine the amount of desired profit.
b.) Determine...
RooPhone Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The...
RooPhone Inc. uses the product cost concept of applying the
cost-plus approach to product pricing. The costs of producing and
selling 5,000 units of cellular phones are as follows: (7 points)
Variable costs Fixed Costs: Direct materials $625,000 Factory
overhead $215,000 Direct labor 225,000 Selling & Admin.
expenses 75,000 Factory Overhead 200,000 Selling & admin. Exp.
150,000 $1,200,000 RooPhone desires a profit equal to a 18% rate of
return on invested assets of $550,000. Required: a.) Determine the
amount of...
Bluebird Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The...
Bluebird Inc. uses the product cost concept of applying the
cost-plus approach to product pricing. The costs and expenses of
producing 25,000 units of Product K are as follows:
Variable costs: $2.50
Direct Materials 4.25
Direct Labor 1.25
Factory Overhead 0.50
Total: 8.50
Fixed Costs $25,000
Selling and Administrative expenses 17,000
Bluebird desires a profit equal to a 5% rate of return on
invested assets of $642,500
a) determine the amount of desired profit from the production
and sale of...
Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing....
Willis Products Inc. uses the product cost concept of applying
the cost-plus approach to product pricing. The costs of producing
and selling 2,000 units of medical tablets are as follows:
Variable costs per unit:
Fixed costs:
Direct materials
$83
Factory overhead
$58,000
Direct labor
30
Selling and admin. exp.
20,000
Factory overhead
26
Selling and admin. exp.
21
Total
$160
Willis Products desires a profit equal to a 25% rate of return
on invested assets of $116,560.
a. Determine the...
Willis Products Inc. uses the total cost concept of applying the cost-plus approach to product pricing....
Willis Products Inc. uses the total cost concept of applying the
cost-plus approach to product pricing. The costs of producing and
selling 4,000 units of medical tablets are as follows:
Variable costs per unit:
Fixed costs:
Direct materials
$99
Factory overhead
$136,000
Direct labor
36
Selling and admin. exp.
44,000
Factory overhead
30
Selling and admin. exp.
25
Total
$190
Willis Products desires a profit equal to a 20% rate of return
on invested assets of $319,600.
a. Determine the...
Hummingbird Company uses the product cost concept of applying the cost-plus approach to product pricing. The...
Hummingbird Company uses the product cost concept of applying
the cost-plus approach to product pricing. The costs and expenses
of producing 25,000 units of Product K are as follows:
Variable costs:
Direct materials
$2.50
Direct labor
4.25
Factory overhead
1.25
Selling and administrative expenses
0.50
Total
8.50
Fixed costs:
Factory overhead
$25,000
Selling and administrative expenses
17,000
Hummingbird desires a profit equal to a 5% rate of return on
invested assets of $642,500.
a. Determine the amount of desired...
Tidewater Company uses the product cost concept of applying the cost-plus approach to product pricing. The...
Tidewater Company uses the product cost concept of applying the
cost-plus approach to product pricing. The cost and expenses of
producing and selling 50,000 units of Product K are as follows:
Variable costs:
Direct materials
$5.00
Direct labor
8.50
Factory overhead
2.50
Selling and administrative expenses
1.00
Total
$17.00
Fixed costs:
Factory overhead
$50,000
Selling and administrative expenses
34,000
Tidewater desires a profit equal to a 10% rate of return on
invested assets of $1,285,000.
a. Determine the amount of...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- A Canadian company issues an 8-year term bond with face value of $1,000 and 6% coupon...
- 1. Consider the following nuclides: &
- In general, teams can be described three ways. Name and define each.
- JAVASCRIPT: Please create an array of student names and another array of student grades. - Create...
- Topic - Construction: Structural, loads, tension 1.) Explain why pure tension members are the most efficient...
- Procter and Gamble (PG) paid an annual dividend of $ 1.62$1.62 in 2009. You expect PG...
- locate a recent case of online child pornography. Write a summary of the incident and describe...
ADVERTISEMENT