Blue Skies Inc. is a retail gardening company that is piloting a new strategic initiative aimed at increasing gross profit. Currently, the company's gross profit is $23\%$ of sales, and its target gross profit percentage is $28\%.$ The company's 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 $2.$

Required:

Determine what the cost of labor, materials, and overhead for both Procedures $1$ and $2$ would need to be for the company to meet its target gross profit.

Cost makeup of Procedure $1$:

Direct Labor

Direct Materials

Overhead

Total

Cost makeup of Procedure $2$:

Direct Labor

Direct Materials

Overhead

Total

The company's actual labor cost is $$120,000$ for Procedure $1.$ Determine the actual cost of direct labor, direct materials, and overhead for each procedure, and the total cost of production for each procedure.

Cost makeup of Procedure $1$:

Direct Labor

Direct Materials

Overhead

Total

Cost makeup of Procedure $2$:

Direct Labor

Direct Materials

Overhead

Total