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. 

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