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Exercise 12-8A (Algo) Allocating costs among products LO 12-3 Perez Construction Company expects to build three new homes during a specific accounting period. The estimated
Exercise 12-8A (Algo) Allocating costs among products LO 12-3 Perez 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 $ 75,000 $106, eee $174, eee Direct naterials 95,000 144,000 185,000 Assume Perez needs to allocate two major overhead costs ($71,000 of employee fringe benefits and $12,750 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: Home Allocation Rate * Weight of Base - Allocated Cost 1 2 3 Total Indirect Materials: Home Allocation Rate Welght of Date Allocated Cost 2 3 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
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