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.
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