Melinda’s Custom Homes, a construction company

jagguarpaw January 19, 2017 0 Comments

Question: Melinda’s Custom Homes, a construction company t…

Melinda’s Custom Homes, a construction company that builds custom-designed houses, incurred costs for the following items.

Wages paid to construction crew $ 106,000
Wood $ 163,000
Production supervisor’s salary $ 55,000
Billboard advertising the company $ 8,000
Rent on office space $ 12,100
Depreciation on tools used at construction sites $ 31,000
Sheet rock $ 98,000
Machine purchased to cut a special kind of tile requested by one customer-cannot be re-used $ 9,800
Gas for the company truck, used to haul supplies to
construction sites
$ 2,100
Paint $ 10,100
Fees paid to electrical contractor, who charges a set amount per house $ 12,000
Depreciation on the company truck, used to haul supplies to construction sites (straight-line) $ 14,000
Insurance premiums $ 14,000
President’s salary $ 106,000
Bricks $ 95,000

Calculate each of the following, where the cost object is the houses built by the company:

a. Total variable costs.

b. Total fixed costs.

c. Total direct costs.

d. Total indirect costs.