Smart Stream Inc. uses the product 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 administrative expenses 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.

Required:
a. Determine the amount of desired profit from the production and sale of 10,000 cellular phones.
b. Determine the cost per unit for the production of 10,000 units of cellular phones.
c. Determine the selling price of cellular phones.