Markup on Cost, Job Pricing
Ventana Window and Wall Treatments Company provides draperies, shades, and various window treatments. Ventana works with the customer to design the appropriate window treatment, places the order, and installs the finished product. Direct materials and direct labor costs are easy to trace to the jobs. Ventana’s income statement for last year is as follows:
|Cost of goods sold:|
|Selling and administrative expenses||32,000|
Ventana wants to find a markup on cost of goods sold that will allow them to earn about the same amount of profit on each job as was earned last year.
1. What is the markup on cost of goods sold
(COGS) that will maintain the same profit as last year? (Round to
the nearest whole percent. Use this amount for future
_______________% of cost of goods sold
2. A customer orders draperies and shades for a remodeling job. The job will have the following costs:
What is the price that Ventana will quote given the markup
percentage calculated in Requirement 1? (Round the price to the
3. What if Ventana
wants to calculate a markup on direct materials cost, since it is
the largest cost of doing business? What is the markup on direct
materials cost that will maintain the same profit as last year?
(Round to the nearest whole percent. Use this amount for future
____________% of direct materials cost
What is the bid price Ventana will use for the job given in
Requirement 2 if the markup percentage is calculated on the basis
of direct materials cost? (Round to the nearest dollar.)
Get Answers For Free
Most questions answered within 1 hours.