Answer Happy

Techcom is designing a new smartphone. Each unit of this new
phone will require $245 of direct materials; $25 of direct labor;
$36 of variable overhead; $33 of variable selling, general, and
administrative costs; $46 of fixed overhead costs; and $25 of fixed
selling, general, and administrative costs.

1. Compute the selling price per unit if the
company uses the total cost method and plans a markup of 180% of
total costs.
2. The company is a price-taker and the
expected selling price for this type of phone is $950 per unit.
Compute the target cost per unit if the company’s target profit is
60% of expected selling price.
3. Compute the selling price per unit if the
company uses the variable cost method and plans a markup of 200% of
variable costs.