Exercise 12-8 Allocating costs among products LO 12-3 Rundle Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows: Home 70,000 91,000 $179,000 Direct labor Direct materials 107,000 146,000 188, 000 Assume Rundle needs to allocate two major overhead costs ($51,000 of employee fringe benefits and $30,870 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.)
House Allocation Rate x Weight of BaseAllocated Cost Total House Allocation Rate x Weight of BaseAllocated C Total cost components to determine the total cost of each house Expected Costs Direct labor Direct materials Fringe benefits Indirect Materials Home 1 Home 2 Home 3 Total Total cost
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