Reference no: EM132716515

Burkina Ltd. is expanding its operations. Due to the expansion, they incurred the following costs during the fiscal period when they constructed a new factory:

Direct labour......................................................................... 70,000
Storage costs materials purchased early at a good price... 2,100
Loan Interest to finance expansion...................................... 3,000
Architectural drawings.......................................................... 15,000
Allocation Fixed overhead .......................................... 22,000
Purchase of company car for the new plant manager......... 44,000
Direct material for factory.................................................... 81,000
Allocation of overhead based on labour
hours worked on factory...................................................... 58,000
Imputed interest on lost opportunity costs........................... 9,000

Problem 1: Which of these costs should be included in the cost of the new factory?