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Exercise 12-8 Allocating costs among products LO 12-3 Jordan Construction Company expects to build three new homes during a specific accounting period. The estimated direct
Exercise 12-8 Allocating costs among products LO 12-3 Jordan 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 Direct labor Direct materials Home 1 $79,000 93.000 Home 2 $ 93,000 134,000 Home 3 $182,000 191,000 Assume Jordan needs to allocate two major overhead costs ($53,100 of employee fringe benefits and $20,900 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.) Fringe Benefits: House Allocation Rate * Weight of Base - Allocated Cost 2 Total Indirect Materials: House Allocation Ratex Weight of Base - Allocated Cost Fringe Benefits: House Allocation Rate x Weight of Base = Allocated Cost WN - S Total $ 0 Indirect Materials: House A llocation Rate x Weight of Base = Allocated Cost x $ 0 2 = 0 Total $ Total $ The cost components to determine the total cost of each house: Expected Costs Home 1 Home 2 Home 3 Direct labor Direct materials Fringe benefits Indirect Materials Total cost $ 0 $ 0 $ 1 TL TTT TTT + 0 0 0 $
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