Mini Case 4_1358 Mississauga Furniture Company produces custom fumiture for walk-in customers. Products include coffee tables, shelving units, bookshelf, and hutches and can be constructed with either pine or oak. Custom kitchen cabinetry and installation will also be considered during the slower winter season. The company is owned and operated by Linda Roberts, who has one full-time carpenter working for her. Linda has worked in the industry for many years and has just started the company. Currently, for customer pricing inquiries, Linda provides a quote based on her best estimate and years of experience in the business and applies a 50% markup on cost. Linda's daughter Lidia has returned home for the summer after completing her rst semester of an accounting program. Lidia described to Linda the benefits of a job-order costing system to track costs and as a basis for quoting sales prices to prospective customers. Linda believes she could use her cost accounting system in her new business and sets aside a few hours to collect and generate the following estimated data: Monthly Estimates: Direct materials - kiln dried pine $27/board foot Direct materials - kiln dried oak $38/board foot Direct labour $20.50/hour Direct labour hours 70 Depreciation - production equipment $1,270 Utilities $518 Other materials 344 Wood shipping cost 256 Rent - production space $1,670 Rent - sales and administrative space $1,510 Salaries - sales and administrative $1,820 Linda has received customer enquiries for price quotes: one is for 3 pine bookshelf and the second is for 12 coffee tables made with oak. Linda has generated the following estimates: Job 1 - Bookshelf Job 2 - Coffee Table Direct materials 22 board feet - Pine 36 board feet - Oak Direct labour hours 28 42At the end of the month, Linda collected the following actual data after completing Jobs 1 and 2. End-of-month actual data: Depreciation - production equipment $1,138 Utilities 1,576 Rent - production space 670 Rent - sales and administrative space 1,360Wood shipping cost Salaries Sales and Administrative Raw materials inventory - beginning Raw materials invento endin; Actual material usa 386 1,567 Required: 1. Assume it is the beginning of the month, using the estimates and a job-order costing system, what price would you recommend Linda quote for each of the above two jobs to ensure protability in the long term? 2. Assume it is the end of the month, determine the amount of under- or over-applied overhead and recommend to Linda how the amount should be accounted for. 3. Prepare a schedule of cost of goods manufactured for the month - these were the only two jobs started and sold (zero beginning and ending work-in-process inventory). Assume that actual materials used and the labour rate/hours are the same as estimated. Hint: refer to Exhibit 5.1 l on page 213 of text for suggested format