Question No: 03 DAMCO Corporation builds houses in tracts, often building as 20 homes simultaneously. The budgeted costs for an expected number of houses in
Question No: 03 DAMCO Corporation builds houses in tracts, often building as 20 homes simultaneously. The budgeted costs for an expected number of houses in 2023 is as follows: Direct Materials 25% Total Costs Direct Labor 2,000,000 Job Construction Overheads 2,500,000 Cost of Jobs Selling and Admin. 150% of M. costs Total Costs $ 12,000,000 The job construction overheads include approximately 60% as fixed costs and 50% of selling and admin. could be classified as variable cost. To survive in the economy, DAMCO has to keep 10% of the total costs as net operating income. Required: 1. Compute the average target markup percentage for selling the price as a percentage of the following: a. Prime costs. b. Full cost of the job c. Variable cost of the job d. Fully-allocated cost of the job e. Make a simple comparative analysis (a-d)
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