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 the jobs. Ventana income statement for last year is as follows: Revenues $ 226,700.00 Cost of goods sold:
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 the jobs. Ventana income statement for last year is as follows:
|
Revenues |
$ 226,700.00 |
||
|
Cost of goods sold: |
|||
|
Direct Materials |
$ 114,000.00 |
||
|
Direct labor |
38,000.00 |
||
|
|
26,000.00 |
178,000.00 |
|
|
Gross Profit |
$ 48,700.00 |
||
|
Selling and administrative expenses |
32,000.00 |
||
|
Operating income |
$ 16,700.00 |
◦Ventana wants to find a mark-up cost 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.
Question:
1.What is the markup on cost of goods sold (COGS) that will maintain the same profit as last year. (Round-off the percentage to two decimal places)
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