Joglo 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 remodels markets. Joggle 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.

Joggle Building Pty Ltd job order cost and apply overhead to production based on direct labour cost. In computing a predetermined overhead rate for 2023, 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 2022

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) Explain what are the disadvantages of using a process costing system for Joggle Building Pty Ltd? (5 Marks)

b) Explain On what basis does Joggle Building Pty Ltd allocate its manufacturing overhead? Compute the predetermined overhead rate for 2023. (5 Marks)

c) Explain and compute the amount of the under or overapplied overhead for 2023. (5 Marks)

d) Joggle Building Pty Ltd had balances in the beginning and ending word in process, and finished goods account as follows. (5 Marks)

1st January 2023 Work in process $5,000,000

Finished Good $13,000,000

31st December 2023 $4,000,000 $11,000,000

Determine the (1) cost of goods manufactured and (2) cost of goods sold for Joggle during 2023. Assume that any under or overapplied overhead should be included in the cost of goods sold.

e) In 2023, Job G408 was started and completed. Its cost sheet showed a total cost of $100,000, and the company prices its product at 25% above its cost. What is the price to the customer if the company follows this pricing strategy? Explain the profit to Joggle building Pty Ltd (10 Marks)