. Q Search Help S Exercise 12-8 Allocating costs among products LO 12-3 Adams Co
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. Q Search Help S Exercise 12-8 Allocating costs among products LO 12-3 Adams Construction Company expects to build three new homes during a specilfic accounting period. The and labor costs are as follows estimated direct materials 61 000 $109,000 $185, 103,000 133,000 16,000 Direct materials Assume Adams needs to allocate two major overhead costs ($53,250 of employee fringe benefits costs) among the three jobs and $33,760 of Indirect materlals Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house rate" to 2 decimal places.) Required (Round "Allocation Total Rate x Weight of Base Prev 1 of 3 Next >Explanation / Answer
Allocation rate: For fringe benefits: Total Fringe benefits 53250 Divide: Total direct Labour 355000 Allocation rate: 15% For Indirect Material: Total Indirect Material 33760 Divide: Total Direct Material 422000 Allocation rate: 8% Fringe Benefits House Allocation Weight Allocated Rate Cost 1 15% 61000 9150 2 15% 109000 16350 3 15% 185000 27750 TOTAL 53250 Indirect material House Allocation Weight Allocated Rate Cost 1 8% 103000 8240 2 8% 133000 10640 3 8% 186000 14880 TOTAL 33760 Cost components to total cost Home 1 Home 2 Home 3 TOTAL Direct Labour 61000 109000 185000 355000 Direct Material 103000 133000 186000 422000 Fringe Benefits 9150 16350 27750 53250 Indirect Material 8240 10640 14880 33760 Total Cost 181390 268990 413630 864010
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