Fanning Construction Company expects to build three new homes during a specific accounting period. The estimated direct
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Question:
Fanning 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 $ 79,000 $ 103,000 $ 183,000
Direct materials 94,000 135,000 185,000
Assume Fanning needs to allocate two major overhead costs ($54,750 of employee fringe benefits and $33,120 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.)
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-0078025655
7th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Old
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