FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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 | $9,226,800 | |
| Direct materials | $2,212,000 | |
| Direct labor | 1,834,000 | |
| Subcontractors | 3,643,000 | 7,689,000 |
| Overhead and profit | $1,537,800 |
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 $553,000. What is the bid? $_________
3. Briefly explain how Whang Construction’s accountant might utilize data analytics to help decide on the markup percentage to use in setting prices. (see Exhibits 2.5 and 2.6, for a review of data analytics types.)
However, one logical use of data analytics would be for the accountant to utilize descriptive analytics to assess the markup percentage applied by other similar companies in the industry.
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