Blue Skies Inc. is a retail gardening company that is piloting a new strategic initiative aimed at increasing gross profit. Currently, the companys gross profit is 25% of sales, and its target gross profit percentage is 30%. The companys current monthly sales revenue is $600,000. The new initiative being piloted is to produce goods in-house instead of buying them from wholesale suppliers. Its in-house production process has two procedures. The makeup of the costs of production for Procedure 1 is 40% direct labor, 45% direct materials, and 15% overhead. The makeup of the costs of production for Procedure 2 is 60% direct labor, 30% direct materials, and 10% overhead. Assume that Procedure 1 costs twice as much as Procedure 2. I have answered most question on a spread sheet.

The new initiative being piloted is to produce goods in-house instead of buying them from wholesale suppliers. Its in-house production process has two procedures. The makeup of the costs of production for Procedure 1 is 40% direct labor, 45% direct materials, and 15% overhead. The makeup of the costs of production for Procedure 2 is 60% direct labor, 30% direct materials, and 10% overhead. Assume that Procedure 1 costs twice as much as Procedure 2.

HERE ARE MY LAST 2 NUMBERS NEEDED FOR THIS ENTIRE EQUATION. 1. Current P1 Overhead materials cost (%70 of total overall) ? =????

2. Less P1 Overhead materials cost savings needed?=????

I have solved question 3. which is Maximum new cost of P1 Overhead materials? = $22,425. So the above 2 numbers have to = $22,425 Please help