(Answered)-Creative Construction Company (CCC) expects to build three new - (2025 Updated Original AI-Free Solution

Question

1. Creative Construction Company (CCC) expects to build three new homes during the first quarter of 2008.? The estimated direct materials and labor costs are as follows:

Expected Costs????????????????? Home 1?????????? Home 2?????????? Home 3

??????????? ????? ????? Direct labor????????????????? $50,000?????????? ??????????? $40,000?????????? ??????????? $60,000

??????????????????????? Direct materials??????????? ??????????? $60,000?????????? ??????????? $80,000?????????? ??????????? $70,000

CCC needs to allocate two major overhead costs for the quarter - $30,000 of employee health insurance and $168,000 of indirect materials costs between the three houses.? CCC decides to allocate heath insurance based on labor cost and indirect material based on material cost.

CCC uses a cost-plus pricing strategy to set the selling price of each home.? The company would like to have a gross margin of 20% of total production cost for each home sold.? Based on this information, what would be the estimated selling price for Home 2?