Reference no: EM132618479
Question - Various equipment used by TWENTYFOUR CO in its operations are either purchased from dealers or self-constructed. The following items for two different types of equipment were recorded during the calendar year 2016.
Manufacturing equipment (self-constructed)
Materials and purchased parts at gross invoice price (Twentyfour failed to take the 2% cash discount) P 450,000
Imputed interest on funds used during construction (stock financing) 36,000
Labor costs 185,000
Overhead costs (fixed - P40,000; variable - P60,000) 100,000
Gain on self-construction 74,000
Installation cost 8,600
Store equipment (purchased)
Cash paid for equipment P 175,000
Freight and insurance cost while in transit 3,500
Cost of moving equipment into place at store 1,200
Wage cost for technicians to test equipment 7,000
Insurance premium paid during first year of operation on this equipment 5,200
Special plumbing features required for this equipment 8,200
Repair cost incurred in first year of operations related to this equipment 1,450
Requirements -
1. What is the total cost of the self-constructed equipment?
2. What is the total cost of the store equipment purchased?