Franklin 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 Direct labor Direct materials Fringe Benefits: Home 1 2 3 Total Indirect Materials: Home 1 Assume Franklin needs to allocate two major overhead costs ($67,200 of employee fringe benefits and $18,080 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. Note: Round "Allocation rate" to 2 decimal places. 2 3 Total Expected Costs Direct labor Direct materials Fringe benefits Indirect materials Total cost Home 1 $ 61,000 107,000 Allocation Rate x Weight of Base X X Allocation Ratex Weight of Base $ The cost components to determine the total cost of each house: Home 1 Home 2 Home 2 $ 101,000 148,000 X 0 X X $ 0 11 = S 11 Home 3 $ 174,000 197,000 11 Allocated Cost 0 0 0 11 $ 12 = S Allocated Cost 0 0 0 S S Home 3 S 0 $ Total 0 0 0 0 0

Franklin 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 Direct labor Direct materials Fringe Benefits: Home 1 2 3 Total Indirect Materials: Home 1 Assume Franklin needs to allocate two major overhead costs ($67,200 of employee fringe benefits and $18,080 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. Note: Round "Allocation rate" to 2 decimal places. 2 3 Total Expected Costs Direct labor Direct materials Fringe benefits Indirect materials Total cost Home 1 $ 61,000 107,000 Allocation Rate x Weight of Base X X Allocation Ratex Weight of Base $ The cost components to determine the total cost of each house: Home 1 Home 2 Home 2 $ 101,000 148,000 X 0 X X $ 0 11 = S 11 Home 3 $ 174,000 197,000 11 Allocated Cost 0 0 0 11 $ 12 = S Allocated Cost 0 0 0 S S Home 3 S 0 $ Total 0 0 0 0 0

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Description: Franklin Construction Company expects to build three new homes during a specific accounting period. The estimated direct materialsand labor costs are as follows.Expected CostsDirect laborDirect materialsFringe Benefits:Home123TotalIndirect Materials

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 1PB: Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven...

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