1. Given the preceding information, what is the markup percentage on total direct costs? ________- 2. Suppose Whang is asked to bid on a job with estimated direct costs of $599,000. What is the bid? $________
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Whang Construction Company is a general contractor that specializes in custom residential housing. Each job requires a bid that includes Whang's direct costs and subcontractor costs as well as an amount referred to as “
| Revenue | $8,634,330 | ||
| Direct materials | $2,234,000 | ||
| Direct labor | 1,862,000 | ||
| Subcontractors | 3,545,000 | 7,641,000 | |
| Overhead and profit | $993,330 |
Required:
1. Given the preceding information, what is the markup percentage on total direct costs?
________-
2. Suppose Whang is asked to bid on a job with estimated direct costs of $599,000. What is the bid?
$________
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