Variable Cost Method of Product Pricing 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: 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 $240
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 cellular phones.

Total variable costs $fill in the blank 1

Variable cost amount per unit $fill in the blank 2

b. Determine the variable cost markup percentage for cellular phones. Round to two decimal places.
fill in the blank 3

%

c. Determine the selling price of cellular phones. If required, round to the nearest dollar.
$fill in the blank 4
325
per cellular phone