Benson Construction Company expects to build three new homes during a specific accounting period. The...
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Accounting
Benson 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 2 Home 3 Home 1 $75,000 $91,000 Direct labor $188,000 Direct materials 92,000 134,000 199,000 Assume Benson needs to allocate two major overhead costs ($35,400 of employee fringe benefits and $25,500 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: Allocation Rate Weight of Base Home 1 Allocated Cost $ 0 2 X 0 3 0 Total $ 0 Indirect Materials: Home Allocation Rate x Weight of Base Allocated Cost 1 $ 0 2 0 3 x Total $ WW* = 0 0 Fringe Benefits: Home 1 2 3 Total Indirect Materials: Home 1 2 3 X 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 Total cost Allocation Rate x Weight of Base Allocated Cost $ 0 0 X = 0 $ 0 Allocation Rate x Weight of Base = Allocated Cost X 0 $ 0 XX X $ 0 11 11 $ $ Home 3 0 0 0 Total $ 0 $ OOOOO 0 0 0 0 0
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