Homework Answers
| House 1 = direct labor cost of house 1 / total direct labor cost | |||||
| House 1 = $ 62,000/ ($ 62,000 + $ 95,000 + $ 1,87,000) | |||||
| House 1 = 18.02% | |||||
| House 2 = direct labor cost of house 2 / total direct labor cost | |||||
| House 2 = $ 95,000/ ($ 62,000 + $ 95,000 + $ 1,87,000) | |||||
| House 2 = 27.62% | |||||
| House 3 = direct labor cost of house 3 / total direct labor cost | |||||
| House 3 = $ 1,87,000/ ($ 62,000 + $ 95,000 + $ 1,87,000) | |||||
| House 3 = 54.36% | |||||
| Fringe Benefits: | |||||
| House | Rate of allocation | Weight | Allocation Cost | ||
| A | B | C | D=B * C | ||
| 1 | 18.02% | 51,600 | 9,298.32 | ||
| 2 | 27.62% | 51,600 | 14,251.92 | ||
| 3 | 54.36% | 51,600 | 28,049.76 | ||
| 100.00% | 51,600.00 | ||||
| allocation rate of each Houses for allocation purposes. | |||||
| House 1 = direct material cost of house 1 / total direct material cost | |||||
| House 1 =$ 98,000/ ($ 98,000 + $ 1,38,000 + $ 1,91,000) | |||||
| House 1 = 22.95% | |||||
| House 2 = direct material cost of house 1 / total direct material cost | |||||
| House 2 =$ 1,38,000/ ($ 98,000 + $ 1,38,000 + $ 1,91,000) | |||||
| House 2 = 32.32% | |||||
| House 3 = direct material cost of house 1 / total direct material cost | |||||
| House 3 =$ 1,91,000/ ($ 98,000 + $ 1,38,000 + $ 1,91,000) | |||||
| House 3 = 44.73% | |||||
| Indirect Materials: | |||||
| House | Rate of allocation | Weight | Allocation Cost | ||
| A | B | C | D=B * C | ||
| 1 | 22.95% | 29,890 | 6,859.76 | ||
| 2 | 32.32% | 29,890 | 9,660.45 | ||
| 3 | 44.73% | 29,890 | 13,369.80 | ||
| 100.00% | 29,890.00 | ||||
| Cost component to determine the total cost of each house | |||||
| Cost | Home - 1 | Home - 2 | Home - 3 | Total | |
| Direct labor | 62,000 | 95,000 | 1,87,000 | 3,44,000 | |
| Direct materials | 98,000 | 1,38,000 | 1,91,000 | 4,27,000 | |
| Fringe benefits | 9,298.32 | 14,251.92 | 28,049.76 | 51,600 | |
| Indirect materials | 6,859.76 | 9,660.45 | 13,369.80 | 29,890 | |
| Total Cost | 1,76,158.08 | 2,56,912.37 | 4,19,419.56 | 8,52,490 | |
| Please do upvote if you found the answer useful. | |||||
| Feel free to reach in the comment section in case of any clarification or queries. |
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