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Rundle Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows.
Rundle 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 Direct labor Direct materials. Hone 1 $ 60,000 103,000 Hone 2 $ 96,000 149,000 Home 3 $178,000 187,000 Assume Rundle needs to allocate two major overhead costs ($66,800 of employee fringe benefits and $26,340 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 = 2 x 3 Total Indirect Materials: Home Allocation Rate x Weight of Base Allocated Cost 1 x 2 x 3 Total The cost components to determine the total cost of each house: Expected Costs Direct labor Direct materials Fringe benefits Indirect materials Total cost Home 1 Home 2 Home 3 Total
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