Question

Campbell 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 $ 78,000 $ 95,000 $ 176,000 Direct materials 92,000 149,000 193,000 Assume Campbell needs to allocate two major overhead costs ($52,350 of employee fringe benefits and $30,380 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.)

Answer 1

Answer:

The driver for employees fringe benefits is direct labor costs whereas the driver for indirect material costs is direct material costs

The total cost of each home is as follows:

Home 1 $188140

Home 2 $268860

Home 3 $408910

Explanation

Find the breakdown of the costs in the attached excel file.

Download xlsx