Question

Sarasota Co. both purchases and constructs various equipment it uses in its operations. The following items for two different types of equipment were recorded in random order during the calendar year 2020.

Purchase
Cash paid for equipment, including sales tax of $5,200		$109,200
Freight and insurance cost while in transit		2,080
Cost of moving equipment into place at factory		3,224
Wage cost for technicians to test equipment		4,160
Insurance premium paid during first year of operation on this equipment		1,560
Special plumbing fixtures required for new equipment		8,320
Repair cost incurred in first year of operations related to this equipment		1,352
Construction
Material and purchased parts (gross cost $208,000; failed to take 2% cash discount)		$208,000
Imputed interest on funds used during construction (stock financing)		14,560
Labor costs		197,600
Allocated overhead costs (fixed-$20,800; variable-$31,200)		52,000
Profit on self-construction		31,200
Cost of installing equipment		4,576

Compute the total cost for each of these two pieces of equipment.

Purchase equipment		$enter a dollar amount
Construction equipment		$enter a dollar amount

Answer 1

$109200 $2080 Purchase equipment cash paid for equipment Frieght and insurance cost, while . in transit cost of moving quipment into plane at factory wage cost for technicians to test equipment $3224 $4160 $ 8320 special plumbing fixtures o purchase cost of Equipment 126984 the An Expenditure is considered as a capital expenditure if it improves the life of asset and effeciency of the asset. Expenditure incurred to bring the asset into use are also capitalized. *

203840 $14560 $197600 Construction cost of equipment Materials and purchased parts (2008000 - 2.1.2 Imputed interest on funds used during construction labor costs Allocated overheads variable less Profit on self construction cost of installing cost of construction $31200 ($31200) 4576. $ 420576