Allocating Costs among Products

Exercise 12-8A (Algo) Allocating costs among products LO 12-3 Rooney Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows Expected Conta Direct labor Direct materials Home Home 2 Home) $68,000 $110,000 $109,000 95,000 137,000 183,000 Assume Rooney needs to allocate two major overhead costs ($55,050 of employee fringe benefits and $16,600 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.) Allocation Rate * Weight of Base Allocated Cont Fringe Benefits Home 1 2 3 Total Allocation Rate x Woight of Base - Allocated Coat Indirect Materials Home 1 2 3 rate" to 2 decimai places.) Fringo Benefits: Home Allocation Rate x Weight of Base = Allocated Cost 11 1 11 2 X 3 Total Indirect Materials: Home Allocation Rate * Weight of Base = Allocated Cost = 1 2 = x = 3 X Total Home 3 Total The cost components to determine the total cost of each house: Expected Costs Home 1 Home 2 Direct labor Direct materials Fringe benefits Indirect materials Total cost