Cost-Based Pricing Decision

Jeremy Costa, owner of Costa Cabinets Inc., is preparing a bid on a job that requires $2,520 of direct materials, $2,268 of direct labor, and $1,764 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 years income statement is as follows:

Sales		$188,500
Cost of goods sold		77,285
	Gross margin	$111,215
Selling and administrative expenses		46,300
	Operating income	$64,915

Required:

1. Calculate the markup that Jeremy will use. Round your answer to one decimal place. fill in the blank 1 %

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