Strategic Initiatives and CSR Blue Skies Inc. is a retail gardening company that is piloting a new strategic initiative aimed at increasing gross profit. Currently, the company$$s gross profit is $21\%$ of sales, and its target gross profit percentage is $26\%.$ The company$$s current monthly sales revenue is $$630,000.$ The new initiative being piloted is to produce goods in$-$house instead of buying them from wholesale suppliers. Its in$-$house production process has two procedures. The makeup of the costs of production for Procedure $1$ is $40\%$ direct labor, $45\%$ direct materials, and $15\%$ overhead. The makeup of the costs of production for Procedure $2$ is $60\%$ direct labor $30\%$ direct materials, and $10\%$ overhead. Assume that Procedure $1$ costs twice as much as Procedure $2.1.$ Determine what the cost of labor, materials, and overhead for both Procedures $1$ and $2$ would need to be for the company to meet its target gross profit. Cost makeup of Procedure $1$: Direct Labor Direct Materials Overhead Total Cost makeup of Procedure $2$: Direct Labor Direct Materials Overhead Total $2.$ The company$$s actual labor cost is $$132,000$ for Procedure $1.$ Determine the actual cost of direct labor, direct materials, and overhead for each procedure, and the total cost of production for each procedure. Cost makeup of Procedure $1$: Direct Labor Direct Materials Overhead Total Cost makeup of Procedure $2$: Direct Labor Direct Materials Overhead Total $3.$ The company is planning a CSR initiative to recycle the indirect materials used in production during Procedure $1.$ The company is paid for any of the indirect materials it recycles, and it applies the income from these payments as a direct offset to the cost of the direct materials. These indirect materials normally makeup $80\%$ of the overhead cost for Procedure $1.$ Determine what the maximum new cost $($net of recycling revenues$)$ of these indirect materials could be for Procedure $1$ if this CSR initiative were to enable the company to meet its target gross profit percentage without changing any other costs. Maximum new cost of P$1$ overhead materials: