Cell Plus Inc. uses the net cost concept of applying the cost-plus approach to product pricing. The cost of selling and producing 5,000 units of cellular phones are as given:
Variable Costs: Fixed Costs:
Direct Materials $125 per unit Factory Overhead $215,000
Direct Labor 45 Selling and admin exp. 75,000
Factory Overhead 40 Selling & admin exp 30
Total $240 per unit
A. Cell Plus uses the product cost idea of applying the cost-plus method to product pricing.
- Evaluate the cost amount per unit and total manufacturing costs for the production and sale of 5,000 units of cellular phones.
- Evaluate the product cost markup percentage rounded to two decimal places for cellular phones.
- Evaluate the selling price of cellular phones.
B. Cell Plus uses the variable cost idea of applying the cost-plus method to product pricing.
- Evaluate the variable costs and the cost amount per unit for the production and sale of 5,000 units of cellular phones.
- Evaluate the variable cost markup percentage rounded to two decimal places for cellular phones.
- Evaluate the selling price of cellular phones.