Question

Product Cost Method of Product Costing

Voice Com, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,890 units of cell phones are as follows:

Variable costs: | Fixed costs: | |||||||

Direct materials | $71 | per unit | Factory overhead | $201,300 | ||||

Direct labor | 40 | Selling and admin. exp. | 71,600 | |||||

Factory overhead | 25 | |||||||

Selling and admin. exp. | 18 | |||||||

Total variable cost per unit | $154 | per unit |

Voice Com desires a profit equal to a 16% rate of return on invested assets of $601,600.

**a.** Determine the amount of desired profit from
the production and sale of 4,890 units of cell phones.

$

**b.** Determine the product cost per unit for the
production of 4,890 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.

Total Cost | $per unit |

Markup | per unit |

Selling price | $per unit |

Answer #1

**Answer**

A..the amount of desired profit from the production and sale of 4,890 units of cell phones:

$601,600*16%

**= $96256**

**B.** the product cost per unit for the production
of 4,890 of cell phones:

Particulars |
Amount |

Variable Cost (4890*$154) | $753060 |

Fixed Cost ($201,300+$71,600) | $272900 |

Total Cost |
$1025960 |

Units | 4890 units |

Cost amount per unit (1025960/4890) |
210 per unit |

C. The product cost markup percentage:

=Desired Profit / Total Costs

=($96256 / 1025960)*100

**=9.38%**

**D.** The selling price of cell phones:

Total Cost | 1025960 | 210 |

Markup (1025960*9.38%) | 96235 | 19.70 |

Selling price |
1122195 |
229.70 |

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Variable costs:
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Variable costs:
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Factory overhead
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Direct labor
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#6
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Voice Com, Inc., uses the product cost method of applying the
cost-plus approach to product pricing. The costs of producing and
selling 4,970 units of cell phones are as follows:
Variable
costs:
Fixed costs:
Direct
materials
$60
per unit
Factory overhead
$198,500
Direct labor
37
Selling and admin. exp.
71,000
Factory
overhead
22
Selling and admin.
exp.
21
Total variable cost per
unit
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per unit
Voice Com desires a profit equal to...

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Voice Com, Inc., produces and sells cellular phones. The costs
of producing and selling 5,000 units of cellular phones are as
follows:
Variable costs:
Fixed costs:
Direct materials
$ 95
per unit
Factory overhead
$235,500
Direct labor
44
Selling and admin. exp.
82,750
Factory overhead
29
Selling and admin. exp.
22
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invested assets of $665,000.
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Please show work
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cost-plus approach to product pricing. The costs of producing and
selling 5,190 units of cell phones are as follows:
Variable costs:
Fixed costs:
Direct materials
$64
per unit
Factory overhead
$200,900
Direct labor
39
Selling and admin. exp.
70,600
Factory overhead
28
Selling and admin. exp.
18
Total variable cost per unit
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Variable costs per unit:
Fixed costs:
Direct materials
$150
Factory overhead
$350,000
Direct labor
25
Selling and administrative expenses
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Factory overhead
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Selling and administrative expenses
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Total variable cost per unit
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a. Determine the...

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selling 10,000 cell phones are as follows:
Variable costs per unit:
Fixed costs:
Direct materials
$150
Factory overhead
$350,000
Direct labor
25
Selling and admin. exp.
140,000
Factory overhead
40
Selling and administrative expenses
25
Total variable cost per unit
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Factory overhead
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Direct labor
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Selling and admin. exp.
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Factory overhead
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Selling and admin. exp.
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Variable costs per unit:
Fixed costs:
Direct materials
$114
Factory overhead
$120,000
Direct labor
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Selling and admin. exp.
39,000
Factory overhead
35
Selling and admin. exp.
29
Total
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Variable costs:
Fixed costs:
Direct materials
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Factory overhead
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Direct labor
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Selling and admin. exp.
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per unit
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on invested...

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