Deka Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows. 

.:.

Assume Deka needs to allocate two major overhead costs ($40,000 of employee fringe benefits and $20,000 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. 

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Expected Costs Home 1 Home 2 Home 3 Direct labor Direct materials $60,000 90,000 $ 90,000 130,000 $170,000 180,000