assume that sirrus phone company uses the variable cost concept of applying the cost 647827
Assume that Sirrus Phone Company uses the variable cost concept of applying the cost plus approach to product pricing. The costs of producing and selling 3,500 units of mobile phones are as follows:
|
Variable costs: |
|
Fixed costs: |
|
|
Direct materials |
$130.00 per unit |
Factory overhead |
$175,000 |
|
Direct labor |
50.00 |
Selling and adm. exp. |
70,000 |
|
Factory overhead |
35.00 |
|
|
|
Selling and adm. exp. |
25.00 |
|
|
|
Total |
$240.00 per unit |
|
|
Sirrus desires a profit equal to a 30% rate of return on invested assets of $350,000.
a. Determine the variable costs and the cost amount per unit for the production and sale of 3,500 units of mobile phones.
b. Determine the markup percentage (rounded to two decimal places) for mobile phones.
c. Determine the selling price of mobile phones. Round to the nearest dollar.