Question
Fanning Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows: Expected
Fanning 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 | $ | 80,000 | $ | 98,000 | $ | 186,000 | |||
| Direct materials | 102,000 | 132,000 | 180,000 | ||||||
Assume Fanning needs to allocate two major overhead costs ($54,600 of employee fringe benefits and $28,980 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 | x | Weight of Base | = | Allocated Cost | |
| 1 | x | = | $0 | |||
| 2 | x | = | 0 | |||
| 3 | x | = | 0 | |||
| Total | $0 | |||||
| Indirect Materials: | ||||||
| House | Allocation Rate | x | Weight of Base | = | Allocated Cost | |
| 1 | x | = | $0 | |||
| 2 | x | = | 0 | |||
| 3 | x | = | 0 | |||
| Total | $0 | |||||
| The cost components to determine the total cost of each house: | ||||||
| Expected Costs | Home 1 | Home 2 | Home 3 | Total | ||
| Direct labor | $0 | |||||
| Direct materials | 0 | |||||
| Fringe benefits | 0 | |||||
| Indirect Materials | 0 | |||||
| Total cost | $0 | $0 | $0 | $0 | ||
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Calculus
Authors: Ron Larson, Bruce H. Edwards
10th Edition
1285057090, 978-1285057095
