Woodbridge Furniture Company produces custom furniture for walk-in customers. Products include coffee tables, shelving units, bookshelves, 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 Robinson Torres, who has one full-time carpenter assisting him in designing and supervising jobs. Robinson has worked in the industry for many years and has just started the company. Currently, for customer pricing inquiries, Robinson provides a quote based on his best estimate and years of experience in the business and applies a 50% markup on cost.

Robinson's daughter Kate is a 4^th-year accounting student at Humber and at home for the reading week break. Kate suggested to Robinson the benefits of a job-order costing system to track costs of production and how this could be used for quoting sales prices to prospective customers. Kate suggested using a predetermined manufacturing overhead rate based on direct labour hours. Robinson believes he could use this managerial accounting tool in his new business and set aside a few hours to collect and generate the following estimated data:

Monthly Estimates:

Direct materials - kiln-dried pine	$37/board foot
Direct materials - kiln dried oak	$48/board foot
Direct labour	$22.50/hour
Direct labour hours for both jobs	120
Depreciation - production equipment	$1,270
Utilities - production space	1,518
Other raw materials	344
Wood shipping cost	338
Rent - production space	1,670
Rent - sales and administrative space	1,510
Carpenter's salary and benefits	1,820

Robinson has received two customer inquiries for price quotes: one for 3 pine bookshelf and the other for 12 coffee tables made with oak. Robinson has generated the following estimates:

	Job 1 - Bookshelf	Job 2 - Coffee Table
Direct materials	102 board feet - Pine	36 board feet - Oak
Direct labour hours	78	42

At the end of the month, Robinson collected the following actual data after completing Jobs 1 and 2.

End-of-month actual data:

Depreciation - production equipment	$1,138
Utilities - production space	1,576
Rent - production space	670
Rent - sales and administrative space	1,360
Other raw materials	536
Wood shipping cost	586
Utilities - Sales office space	812
Telephone - 40% production 60% administrative	300
Salaries - Sales and Administrative	1,567
Carpenter's Salary and benefits	2,000
Shipping and delivery of finished goods	320
Beginning Raw materials - woods	480
Ending Raw materials - Woods	368
Actual material usage and labour rate/hours equals Robinson's estimate

Required:

1. Assume it is the beginning of the month, using the estimates and a job-order costing system, what price would you recommend Robinson quote for each of the above two jobs to ensure profitability in the long term?

1. Assume it is the end of the month, determine the amount of under-or over-applied overhead and recommend to Robinson how the amount should be accounted for.

1. Do a schedule of Cost of Goods Manufactured for the month - these were the only two jobs started and finished (zero beginning and ending work-in-process inventory). Assume that the actual materials used, and the labour rate/hours are the same as estimated. Hint: refer to Exhibit 5.11 on page 213 of the textbook for the suggested format.