What amount should manufacturing plant be initially record

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Factor Company built an item of plant manufacturing division. The costs incurred for the construction of the plant are as follows:

Contractors' cost Php 20,000,000;

Direct materials and labor used in the construction Php 8,000,000;

Engineering and technical overheads, Php 2,000,000;

Interest cost incurred to finance construction Php 1,000,000 and

general administrative cost allocated Php 1,500,000.

Of the direct materials and labor used, Php 1,500,000 is attributable to cost of inefficiencies caused by a labor strike.

Problem 1: During the construction of the asset, Factor Company entered into an incidental operation wherein the company uses the vacant plant site as parking lot. Total revenue from the parking lot was Php 125,000 and related cost incurred was Php 10,000. At what amount should the manufacturing plant be initially recorded?

Reference no: EM132743624

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