12 Questions
What is the company's current gross profit percentage?
25%
If Procedure 2 costs $10,000 in direct materials, what would Procedure 1's direct materials cost be assuming it costs twice as much?
$15,000
How much is the company's target gross profit assuming monthly sales revenue of $600,000?
$180,000
If Procedure 1's direct labor cost is $50,000, what would be the total cost of production for Procedure 1 based on the given cost makeup percentages?
$125,000
What would be the total cost of production for Procedure 2 if overhead costs are $9,000?
$11,000
In the new initiative to produce goods in-house instead of buying from wholesale suppliers, what is the main reason for the strategic change?
To increase gross profit
Blue Skies Inc. is a retail gardening company aiming to increase gross profit from 25% to ______%
30
The cost makeup of Procedure 1 is 40% direct labor, 45% direct materials, and 15% ______
overhead
Procedure 1 costs twice as much as Procedure ______
2
The company's actual labor cost for Procedure 1 is ______
$114,000
For Procedure 2, the cost makeup is 60% direct labor, 30% direct materials, and 10% ______
overhead
The company's current monthly sales revenue is $______
600,000
Calculate the new gross profit percentage for Blue Skies Inc. by analyzing their current gross profit, target gross profit, and cost of production procedures. Understand the impact of the new in-house production initiative on the company's financials.
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