Hi! I'm looking for help with parts B and C of this question:

Assume a builder is building three houses simultaneously. The direct materials and direct labor costs for each house are shown below:

	House 1	House 2	House 3
Direct Materials	$140,000	$ 70,000	$90,000
Direct Labor	210,000	130,000	60,000
Overhead	?	?	?

The building contractors total indirect costs/Overhead (such as supervisory salaries and indirect materials) are $84,000.

Required

a. Assume the builder allocates overhead (indirect) costs equally among the three houses. Determine the amount of overhead cost allocated to each house. Comment on whether this allocation scheme is reasonable. Explain why number of units may be an inappropriate allocation base in this case.

b.Assume instead that the builder allocates overhead costs based on total direct costs. Determine the amount of overhead cost allocated to each house. Compare the allocations determined inrequirement awith the allocations determined inrequirement b. Identify who will benefit and who will suffer if the builder uses therequirement ballocation method instead of allocating overhead equally.

c. Assume that the $84,000 of total overhead cost consists of $63,000 of indirect materials and $21,000 of fringe benefits (such as health care and retirement costs for the laborers). Decide what you believe is the most rational allocation scheme and use that scheme to allocate the overhead cost to the three houses.