Response to the following :
Based on the data presented in Exercise, assume that Global Cellular Inc. uses the variable cost concept of applying the cost-plus approach to product pricing.
a. Determine the variable costs and the cost amount per unit for the production and sale of 80,000 units of computer tablets.
b. Determine the variable cost markup percentage (rounded to two decimal places) for computer tablets.
c. Determine the selling price of computer tablets. Round to the nearest cent.
Exercise :
Global Devices Inc. uses the total cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 80,000 units of computer tablets are as follows:
Variable costs: Fixed costs:
Direct materials $ 90 per unit Factory overhead $800,000
Direct labor 20 Selling and admin. exp. 300,000
Factory overhead 30
Selling and admin. exp. 15
Total $155 per unit
Global Devices desires a profit equal to an 18% rate of return on invested assets of $6,000,000.
a. Determine the amount of desired profit from the production and sale of computer tablets.
b. Determine the total costs and the cost amount per unit for the production and sale of 80,000 units of computer tablets.
c. Determine the total cost markup percentage for computer tablets.
d. Determine the selling price of computer tablets.