Smart Stream Inc. uses the variable cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 cell phones are as follows: Variable costs per unit: Line Item Description Amount Direct materials $150 Direct labor 25 Factory overhead 40 Selling and administrative expenses 25 Total variable cost per unit $240 Fixed costs: Line Item Description Amount Factory overhead $350,000 Selling and administrative expenses 140,000 Smart Stream desires a profit equal to a 30% return on invested assets of $1,200,000. a. Determine the variable costs and the variable cost amount per unit for the production and sale of 10,000 cell phones. Line Item Description Amount Total variable costs fill in the blank 1 of 2$ Cost amoun

Smart Stream Inc. uses the variable cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 cell phones are as follows: Variable costs per unit: Line Item Description Amount Direct materials $150 Direct labor 25 Factory overhead 40 Selling and administrative expenses 25 Total variable cost per unit $240 Fixed costs: Line Item Description Amount Factory overhead $350,000 Selling and administrative expenses 140,000 Smart Stream desires a profit equal to a 30% return on invested assets of $1,200,000. a. Determine the variable costs and the variable cost amount per unit for the production and sale of 10,000 cell phones. Line Item Description Amount Total variable costs fill in the blank 1 of 2$ Cost amoun

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 17E: Product cost method of product costing Smart Stream Inc. uses the product cost method of applying...

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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 profit from the production and sale of Product K. b. Determine the total manufacturing costs and the cost amount per unit for the production of 25,000 units of Product K. Total manufacturing costs Cost amount per unit c. Determine the markup percentage for Product K. Round your answer to one decimal place. d. Determine the selling price of Product K. Round your answer to two decimal places.