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:LO1

Transcribed Image Text:

Revenues Cost of goods sold: Direct materials Direct labor Overhead Gross profit Selling and administrative expenses Operating income $273,920 $124,000 45,000 45,000 214,000 $ 59,920 19,400 $ 40,520