Expected Costs
Direct labor
Direct materials
Home 1
Home 2
$ 76,000 $ 95,000
105,000 139,000
Home 3
$ 172,000
183,000
Assume Baird needs to allocate two major overhead costs ($51,450 of employee fringe benefits and $21,350 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:
Home
Allocation Rate x Weight of Base = Allocated Cost
1
X
=
2
X
=
3
X
=
Total
Indirect Materials:
Home
Allocation Rate x Weight of Base = Allocated Cost
1
X
=
2
X
=
3
X
=
Total
The cost components to determine the total cost of each house:
Expected Costs
Direct labor
Direct materials
Home 1
Home 2
Fringe benefits
Indirect materials
Total cost
Home 3
Total