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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: Expected
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 Home 1 $ 61,000 103,000 Home 2 $110,000 134,000 Home 3 $171,000 199,000 Assume Rundle needs to allocate two major overhead costs ($34,200 of employee fringe benefits and $39,240 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 2 X 3 Total Indirect Materials: House Allocation Rate x Weight of Base = Allocated Cost 1 2 3 Total Home 3 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
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