Please help with this problem.
Assume a builder is constructing three houses simultaneously. The direct materials and direct labor costs for each house are shown below:
Indirect costs such as supervisory salaries and indirect materials are $84,000.
A) Assume the builder allocates overhead (indirect) costs equally among the three houses. Determine the amount of overhead cost allocated to each house. Comment on whether this allocation scheme is reasonable. Explain why it may be inappropriate to use number of units as the allocation base.
This question was answered on: Sep 16, 2020
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