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Adams Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows. Expected
Adams Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows.
Expected Costs | Home 1 | Home 2 | Home 3 | ||||||
Direct labor | $ | 63,000 | $ | 94,000 | $ | 188,000 | |||
Direct materials | 100,000 | 146,000 | 183,000 | ||||||
Assume Adams needs to allocate two major overhead costs ($69,000 of employee fringe benefits and $25,740 of indirect materials costs) among the three jobs. Required Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house. (Round "Allocation rate" to 2 decimal places.
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