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Markup on Cost, Cost-Based Pricing

Arthur Quillen Construction Company is a general contractor that specializes in custom residential housing. Each job requires a bid that includes Quillens direct costs and subcontractor costs as well as an amount referred to as overhead and profit. Quillens bidding policy is to estimate the costs of direct materials, direct labor, and subcontractors costs. These are totaled, and a markup is applied to cover overhead and profit. In the coming year, the company believes it will be the successful bidder on 10 jobs with the following total revenues and costs:

Revenue			$8,451,540
Direct materials	$2,268,000
Direct labor	1,906,000
Subcontractors	3,440,000		7,614,000
Overhead and profit			$837,540

Required:

1. Given the preceding information, what is the markup percentage on total direct costs? fill in the blank %

2. Suppose Quillen is asked to bid on a job with estimated direct costs of $588,000. What is the bid? $fill in the blank