Markup on Cost, Job Pricing

Ventana Window and Wall Treatments Company provides draperies, shades, and various window treatments. Ventana works with the customer to design the appropriate window treatment, places the order, and installs the finished product. Direct materials and direct labor costs are easy to trace to the jobs. Ventanas income statement for last year is as follows:

Revenues			$229,700
Cost of goods sold:
Direct materials	$117,147
Direct labor	39,049
Overhead	27,564		183,760
Gross profit			$45,940
Selling and administrative expenses			25,400
Operating income			$20,540

Ventana wants to find a markup on cost of goods sold that will allow them to earn about the same amount of profit on each job as was earned last year.

Required:

Direct materials	$1,050
Direct labor	210
Applied overhead	105
Total cost	$1,365

3. What if Ventana wants to calculate a markup on direct materials cost, since it is the largest cost of doing business? What is the markup on direct materials cost that will maintain the same profit as last year? (Round to the nearest whole percent. Use this amount for future calculations.) _________ % of direct materials cost

What is the bid price Ventana will use for the job given in Requirement 2 if the markup percentage is calculated on the basis of direct materials cost? (Round to the nearest dollar.) $_____________