Cost$-$Based Pricing Decision

Jeremy Costa, owner of Costa Cabinets Inc., is preparing a bid on a job that requires $$2,430$ of direct materials, $$2,430$ of direct labor, and $$1,458$ of overhead. Jeremy normally applies a standard markup 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 income statement is as follows:

Line Item Description Amount

Sales $$143,000$

Cost of goods sold $77,220$

Gross margin $$65,780$

Selling and administrative expenses $46,300$

Operating income $$19,480$

Required:

$1.$ Calculate the markup that Jeremy will use. Round your answer to one decimal place.

fill in the blank $1$ of $2$

$\%$

$2.$ What is Jeremy's initial bid price? Round your answer to the nearest dollar.

fill in the blank $2$ of $2$$