Case 1 ( Total Marks = 30 Marks) Martinez Building Pty Ltd is one of the largest manufacturers and marketers of unique, custom-made residential garage doors in Sydney, Australia. It also is a major supplier of industrial and commercial doors, grills and counter shutters for the new-construction, repair and remodel markets. Martinez Building Pty Ltd has developed plans for continued expansion of a new network of services operations that sell, install and service manufactured fireplaces, garage doors and related products. Martinez Building Pty Ltd job order cost and applies overhead to production on the basis of direct labour cost. In computing a predetermined overhead rate for the year 2021, the company estimated manufacturing overhead to be $24,000,000 and direct labour cost to be $20,000,000. In addition, it developed the following information Actual Costs Incurred During 2021 Direct materials used Direct labour cost incurred Insurance, factory Indirect labour Factory maintenance Rent on factory building Depreciation on factory equipment Instructions Answer each of the following $ 30,000,000 $ 21,000,000 $ 500,000 $ 7,500,000 $ 1,000,000 $ 11,000,000 $ 2,000,000 a) Why is Martinez Building Pty Ltd using a job order cost system? (5 Marks) b) On what basis does Martinez Building Pty Ltd allocate its manufacturing overhead? Compute the predetermined overhead rate for 2021. (5 Marks) c) Compute the amount of the under- or overapplied overhead for 2021. (5 Marks) d) Martinez Building Pty Ltd had balances in the beginning and ending word in process and finished goods account as follows. (5 Marks)

1st January 2021 Work in process $5,000,000 Finished Good $13,000,000 31st December 2021 $4,000,000 $11,000,000 Determine the (1) cost of goods manufactured and (2) cost of goods sold for Martinez during 2021. Assume that any under- or overapplied overhead should be included in the cost of goods sold. e) During 2021, Job G408 was started and completed. Its cost sheet showed a total cost of $100,000 and the company prices its product at 50% above its cost. What is the price to the customer if the company follows this pricing strategy? Explain the profit to Martinez building Pty Ltd