Jeremy Costa, owner of Costa Cabinets Inc., is preparing a bid on a job that requires $2,160 of direct materials, $2,160 of direct labor, and $1,080 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: Sales Cost of goods sold $136,500 77,805 Gross margin $58,695 Selling and administrative expenses 46,300 Operating income $12,395 Required: 1. Calculate the markup that Jeremy will use. Round your answer to one decimal place. 75 X % 2. What is Jeremy's initial bid price? Round your answer to the nearest dollar. Feedback Check My Work 1. Markup Percentage = Gross margin/Cost of Goods Sold 2. Add costs, Direct Material, Direct Labor and Overhead. Price using Markup = Cost per Unit + (Cost per Unit x Markup Percentage)