Question
Longman Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows. Expected
Longman 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 $ 62,000 $ 97,000 $ 186,000 Direct materials 96,000 142,000 195,000 Assume Longman needs to allocate two major overhead costs ($46,575 of employee fringe benefits and $8,660 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 3 decimal places.)
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