Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen

تمرين 46

MARKUP ON COST, JOB PRICING
Cliff Meyers owns and operates Cliff 's Car Repair Company. Cliff maintains and repairs automobiles and trucks. Direct materials and direct labor costs are easy to trace to the jobs. Cliff's income statement for last year is as follows:

Cliff wants to find a markup on cost of goods sold that will allow him to earn about the same amount of profit on each job as was earned last year.
Required:
1. What is the markup on cost of goods sold (COGS) that will maintain the same profit as last year?
2. A customer brings in a car that needs a water pump replacement and some general maintenance. The job will have the following costs:

What is the price that Cliff will quote given the markup percentage calculated in Requirement 1?
3. What if Cliff 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? What is the bid price Cliff will use for the job given in Requirement 2 if the markup percentage is calculated on the basis of direct materials cost?