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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 Direct labor $ 67,000 $ 94,000 132,000 Home 3 $186,000 189,000 Direct materials 106,000 Assume Perez needs to allocate two major overhead costs ($34,700 of employee fringe benefits and $8,540 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 x Weight of Base Allocated Cost 1 = X $ 0 2 X = 0 3 0 = X Total Indirect Materials: Home Allocation Rate V Weight of Race. $ 0 Allocated Cost www Fringe Benefits: Home Allocation Rate x Weight of Base 1 X 2 X 3 X Total Indirect Materials: Home Allocation Rate x Weight of Base = 1 X = 2 X 3 X = 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 0 $ 0 = = 11 Allocated Cost $ 0 0 Allocated Cost $ 0 $ $ 0 0 Home 3 0 0 0 0 Total 0 0 0 0 0
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