Martinez Building Products Company is one of the largest manufacturers and marketers of unique,custom made residential garage doors in the U.S. It also is a major supplier of industrial and commercial doors,grills, and counter shutters for the new construction,repair and remodel markets.

Martinez uses a job cost system and applies overhead to production on the basis of direct labour cost.In computing a predetermined overhead rate for the year 2018,the company estimated manufacturing overhead to be $24 million and direct labour costs to be $20 million.In addition,it developed the following information.

Actual costs incurred during 2018

Direct materials used $30,000,000

Direct labour cost incurred 21,000,000

Insurance for factory 5000,000

Indirect labour 7,500,000

Factory maintenance 1,000,000

Rent on factory building 11,000,000

Depreciation on factory equipment 2,000,000

Required

1) Why is Martinez Building Products Company using a job costing system?(3 marks)

2) On what basis does Martinez allocate its manufacturing overhead?Please calculate the predetermined overhead rate for 2018.(3 marks)

3) Calculate the amount of the under or oversupplied overhead for 2018.(2 marks)

4 of 4 Question 4. (8 marks Martiner Building Products Companysone of the lagest manuletures and markieters of unique commencial doors,gils, and couner shutters for the neinand emode Martinet unes a job cost sytem and applies overhead to production on the bs of Sirect labour os In computing a predetermined overhead rate for the yer 30 the company estimated manulacturing owerhead to be $24 million and direct labour cs to be 520mionaddition, e developed the following information Insurance for facsory 500000 Factory maintenance Rent on factery building Degreciltion on factory equipment 2000,000 Required Why is Martinez Building Products Company using a job ctingsitem? (3 marks 2) On what basis does Martines allocate its manufactuingoh Please calculate the predetermined overhead rate for 2018 (3m 3) Cakulate the amount ofthe underor overapplied overhead for 2018 12 mark