Show Me How Calculator Product Cost Method of Product Costing Smart Stream Inc u
ID: 2521946 • Letter: S
Question
Show Me How Calculator Product Cost Method of Product Costing Smart Stream Inc uses the product cost method of applying the cost-plus approach to product pricing. Variable costs per unt: The costs of producing and selling 10,000 cell phones are as follows Fixed costs: Direct materiais $150 Factory overhead $350,000 Selling and administrative expenses Direct labor 25 40 25 $240 140,000 Factory overhead Seling and administrative Totel vanable cest per unit )Smart Stream deures a profit equal to a 30% return on "vested assets of$1,200,000. Determine the amount of desired profnt from the production and sale of 10,000 cel phores. b. Determine the product cost per unilt for the production of 30,000 unts of cell phones e. Detemine the product cost markup percentage for cell phones ne seling pnice of cell phones d. Determine Round to Vie nearest dollar. Seling price per unitExplanation / Answer
(a)Desired profit = Investment * Desired return
= 1200000 * 30%
= 360000
(b) Cost Per Unit
Variable Cost 240
Factory O/h 35 (350000/10000)
Selling o/h 14 (140000/10000)
Cost per unit 289
(d) Desired profit per unit = 360000 / 10000 = 36 per unit
Mark up % = Profit/Cost*100
= 36 / 289 *100 = 12.46%
(e) Total cost = 289 per unit
Mark up 36 per unit
Selling price 325 per unit