Scribd Logo
Upload

Welcome to Scribd!

  • 426 views

    Requirement 1:: Sales Cost of Goods Sold) Cost of Goods Sold X 100 X 100 X 100

    Uploaded by

    KHAkadsbdhsg
    Jeremy Costa is preparing a bid for a job requiring P90,000 in materials, P80,000 in labor, and P40,000 in overhead. Using last year's 170.3% markup on cost of goods sold, his initial bid price is P567,630. This is calculated by taking the total costs of P210,000 and applying the 170.3% markup percentage.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Requirement 1:: Sales Cost of Goods Sold) Cost of Goods Sold X 100 X 100 X 100

    Uploaded by

    KHAkadsbdhsg
    426 views1 page
    Jeremy Costa is preparing a bid for a job requiring P90,000 in materials, P80,000 in labor, and P40,000 in overhead. Using last year's 170.3% markup on cost of goods sold, his initial bid price is P567,630. This is calculated by taking the total costs of P210,000 and applying the 170.3% markup percentage.

    Original Title

    Costram_FA2

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Jeremy Costa is preparing a bid for a job requiring P90,000 in materials, P80,000 in labor, and P40,000 in overhead. Using last year's 170.3% markup on cost of goods sold, his initial bid price is P567,630. This is calculated by taking the total costs of P210,000 and applying the 170.3% markup percentage.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    426 views1 page

    Requirement 1:: Sales Cost of Goods Sold) Cost of Goods Sold X 100 X 100 X 100

    Uploaded by

    KHAkadsbdhsg
    Jeremy Costa is preparing a bid for a job requiring P90,000 in materials, P80,000 in labor, and P40,000 in overhead. Using last year's 170.3% markup on cost of goods sold, his initial bid price is P567,630. This is calculated by taking the total costs of P210,000 and applying the 170.3% markup percentage.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Jeremy Costa, owner of Costa Cabinets Inc.

    is preparing a bid on a job that requires


    P90,000 of direct materials, P80,000 of direct labor, and P40,000 of overhead.  Jeremy
    normally applies a standard mark-up based on cost of goods sold to arrive at an initial
    bid price.  He then adjusts the price as necessary in light of other factors (e.g.
    competitive pressure).  Last year's statement is as follows:
     
                      Sales                                                           P6,500,000
                      Cost of goods sold                                         2,405,000
                          Gross margin                                             4,095,000
                      Selling and administrative expenses             2,315,000
                           Operating income                                     1,780,000

    Required:
    1.  Calculate the markup that Jeremy will use. (Use 1 decimal point for the markup
    percentage.  Ex. 130.6%)
    2.  What is Jeremy's initial bid price?

    Solution:
    Requirement 1:

    (Sales−Cost of Goods Sold )


    Markup Percentage = x 100
    Cost of Goods Sold
    (6,500,000−2,405,000)
    = x 100
    2,405,000
    4,095,000
    = 2,405,000 x 100

    = 170.3%

    Requirement 2:
    Direct Materials P90,000
    Direct Labor 80,000
    Overhead 40,000
    Total Cost P210,000

    Initial Bid Price = Total Cost + (Markup Percentage x Total Cost)


    = 210,000 + (170.3% x 210,000)
    = 210,000 + 357,630
    = P567,630

    You might also like