Coombes is examining the activities for the past year. Voguish Couches rents a small administrative office in Melbourne's central business district (CBD) for $30,000 per year and a large warehouse in Tullamarine for $40,000 per year. The cost with salary for staff in the administrative office in the CBD is $90,000 per year. Voguish Couches has hired a firm for managing the sales and this firm charges a commission of $50 for each completed sale. The invoicing system used by Voguish Couches is outsourced and for each sale completed the firm charges $5. The administrative office had in the past year other miscellaneous costs of $5,000, mostly costs with the lease of material and stationery, and this yearly cost is expected to remain the same amount for years to come. A full-time employee gets paid $80,000 per year for supervising the casual staff working in the warehouse in Tullamarine. Like the administrative office, the warehouse had other miscellaneous costs of $5,000 in the past year and is expected to remain the same amount for years to come. Voguish Couches has a contract with a delivery firm for delivering the copies of the sofas to their clients, but Coombes is not able to find the contract and is not sure how much the firm charges per transaction. The only information he can gather is regarding the past years: Table 1 - Annual unit delivery and costs Year Delivery Cost Units Delivered Two years ago $1,500 600 Three years ago $1,420 575 Four years ago $1,480 580Five years ago $1,400 550 Below is a table listing all the material used during the past year to manufacture 500 sofas and the costs incurred. There was no stock or work in process in the beginning or end of the year. Table 2 - Material costs Material Quantity Total Cost Fabric 1,500 m $3,000 Timber 6,000 Units $36,000 Foam 500 Kilograms $250 Button stud 5,000 Units $500 Varnish 500 Litres $10,000 Bolt 5,000 Units $500 The manufacturing activity is made by casual staff. The first stage is the woodworking, where a carpenter is hired by $30 per hour for working with the timber. This task is very labour intensive and for preparing the material a carpenter takes 5 hours per sofa. Once the timber is ready for being assembled a casual staff is paid $25 per hour for assembling the sofa with the bolts and adding the paddings (fabric, foam, and button studs). The assembling takes only 1 hour per sofa. The final stage of manufacturing is varnishing the sofa. A casual staff is paid $27 per hour for varnishing the sofa and this task takes 2 hours.Question 4 In the current year, Lennox and Steward were approached by Le Bon who wants to buy 60 sofas. Lennox and Steward want to know the manufacturing costs for this job, considering Voguish Couches has a production budget of 600 sofas for the current year. For allocating the manufacturing overhead (i.e., indirect cost pool) Voguish Couches uses the direct labour-hours (i.e., cost-allocation base), but Coombes is struggling with job costing in manufacturing and has asked for your help. Required a) Calculate the direct manufacturing costs, the indirect manufacturing costs, and the total manufacturing costs of this job. (Job costing in manufacturing, Chapter 3, 10 marks) b) Using a mark-up percentage of 30%, how much should Lennox and Steward charge for the order of 60 sofas? Considering the actual figures for the current year follow what has been budgeted, Will Voguish Couches be profitable if Lennox and Steward use a mark-up percentage of 30% for all sales during the current year? Use your calculations for supporting your argument. (Cost plus pricing, Chapter 12, 10 marks)