Kegler Bowling buys scorekeeping equipment with an invoice cost of $185,000. The electrical work required for the installation costs $19.000. Additional costs are $3,800 for delivery and $13,300 for sales tax. During the installation, the equipment was damaged and the cost of repair was $1,795. Required: Indicate whether each cost should be included in the cost of the equipment or excluded and expensed as incurred. Costs Invoice cost Electrical work required for installation Delivery costs Sales tax Repair costs Total recorded cost Amount $ 185,000 10,000 3.800 13,300 1.795 Included or Excluded Account

Kegler Bowling buys scorekeeping equipment with an invoice cost of $185,000. The electrical work required for the installation costs $19.000. Additional costs are $3,800 for delivery and $13,300 for sales tax. During the installation, the equipment was damaged and the cost of repair was $1,795. Required: Indicate whether each cost should be included in the cost of the equipment or excluded and expensed as incurred. Costs Invoice cost Electrical work required for installation Delivery costs Sales tax Repair costs Total recorded cost Amount $ 185,000 10,000 3.800 13,300 1.795 Included or Excluded Account

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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Kegler Bowling buys scorekeeping equipment with an invoice cost of $175,000. The electrical work required for the installation costs $18,200. Additional costs are $3,640 for delivery and $12,600 for sales tax. During the installation, the equipment was damaged and the cost of repair was $1,700. Required: Indicate whether each cost should be included in the cost of the equipment or excluded and expensed as incurred. Included or Costs Amount Acco Excluded Invoice cost $ 175,000 Electrical work required for installation 18,200 Delivery costs 3,640 Sales tax 12,600 Repair costs 1,700 Total recorded cost
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