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Martinez Building Products Company is one of the largest manufacturers and marketers of unique, custom-made residential garage doors in the United States. It also is a major supplier of industrial and commercial doors, grills, and counter shutters for the new-construction, repair, and remodel markets. Martinez has developed plans for continued expansion of a network of service operations that sell, install, and service manufactured fireplaces, garage doors, and related products. Martinez uses a job order cost system and applies overhead to production on the basis of direct labor cost. In computing a predetermined overhead rate for the year 2014, the company estimated manufacturing overhead to be $24 million and direct labor costs to be $20 million. In addition, it developed the following information. Actual Costs Incurred During 2014 Direct materials used $30,000,000 Direct labor cost incurred 21,000,000 Insurance, factory 500,000 Indirect labor 7,500,000 Factory maintenance 1,000,000 Rent on factory building 11,000,000 Depreciation on factory equipment 2,000,000 Instructions Answer each of the following. (a) Why is Martinez Building Products Company using a job order cost system? (b) On what basis does Martinez allocate its manufacturing overhead? Compute the predetermined overhead rate for 2014. (c) Compute the amount of the under- or overapplied overhead for 2014. (d) Martinez had balances in the beginning and ending work in process and finished goods accounts as follows. 1/1/14 12/31/14 Work in process $ 5,000,000 $ 4,000,000 Finished goods 13,000,000 11,000,000 Determine the (1) cost of goods manufactured and (2) cost of goods sold for Martinez during 2014. Assume that any under-or overapplied overhead should be included in the cost of goods sold. (e) During 2014, 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