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 “overhead and profit.” Whang's bidding policy is to estimate the costs of direct materials, direct labor, and subcontractors' costs. These are totaled, and a markup is applied to cover overhead and profit. In the coming year, the company believes it will be the successful bidder on 10 jobs with the following total revenues and costs: Revenue $8,720,320 Direct materials $2,245,000 Direct labor 1,741,000 Subcontractors 3,342,000 7,328,000 Overhead and profit $1,392,320 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 $589,000. What is the bid? $________
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 “overhead and profit.” Whang's bidding policy is to estimate the costs of direct materials, direct labor, and subcontractors' costs. These are totaled, and a markup is applied to cover overhead and profit. In the coming year, the company believes it will be the successful bidder on 10 jobs with the following total revenues and costs: Revenue $8,720,320 Direct materials $2,245,000 Direct labor 1,741,000 Subcontractors 3,342,000 7,328,000 Overhead and profit $1,392,320 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 $589,000. What is the bid? $________
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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 | $8,720,320 | ||
| Direct materials | $2,245,000 | ||
| Direct labor | 1,741,000 | ||
| Subcontractors | 3,342,000 | 7,328,000 | |
| Overhead and profit | $1,392,320 |
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 $589,000. What is the bid?
$________
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