Fringe Benefits: Home Allocation Rate x Weight of Base Allocated Cost %3D $ %3D %3D %3D Total $4 Indirect Materials: Home Allocation Rate x Weight of Base Allocated Cost %3D 2 X %3D 3 %3D Total $4 The cost components to determine the total cost of each house: Expected Costs Home 1 Home 2 Home 3 Tota $4 Direct labor Direct materials Fringe benefits Indirect materials Total cost $ 2$ 24 $ %24 x x x

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Rundle Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials adn labor costs are as follows.

Expected Cost Home 1  Home 2  Home 3
Direct Labor $77,000 $100,000 $172,000
Direct Materials 108,000 146,000 198,000

Assume Randle needs to allocate two major overhead costs ($69,800 of employee fringe benefits and $36160 of indirect materials costs) among the three jobs. 

Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house. "Round allocated rate to two decimal places. 

 

Fringe Benefits:
Home
Allocation Rate
x Weight of Base
Allocated Cost
!!
1
es
24
%3D
3
Total
24
Indirect Materials:
Home
Allocation Rate
x Weight of Base
Allocated Cost
%3D
1
3
0.
Total
2$4
The cost components to determine the total cost of each house:
Expected Costs
Home 1
Home 2
Home 3
Total
Direct labor
2$
0.
Direct materials
Fringe benefits
0.
Indirect materials
$4
$4
0.
2$
Total cost
24
%24
||| || I|
Transcribed Image Text:Fringe Benefits: Home Allocation Rate x Weight of Base Allocated Cost !! 1 es 24 %3D 3 Total 24 Indirect Materials: Home Allocation Rate x Weight of Base Allocated Cost %3D 1 3 0. Total 2$4 The cost components to determine the total cost of each house: Expected Costs Home 1 Home 2 Home 3 Total Direct labor 2$ 0. Direct materials Fringe benefits 0. Indirect materials $4 $4 0. 2$ Total cost 24 %24 ||| || I|
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