Why do we include all the incidental charges relating to the acquisition of a machine in its cost?

Q: How much is the cost of th

A: To calculate the cost of acquisition or self construction, IAS 16 should be referred.

Q: For inventoriable costs to become expenses under the matching principle, the product must be…

A: Inventoriable Cost is the Product cost that  include direct Material,Labor and  manufacturing cost

Q: is amortization of patent included in statement of costs of goods manufactured?

A: The income earned by a corporation after deducting the direct costs of manufacturing its products is…

Q: Costs that are treated as assets until the product is sold are called Product costs Period costs…

A: Inventory cost is the cost of product capitalized and shown as assets until sold. Period cost are…

Q: Under the reciprocal method, what would be the total Engineering department cost?

A: Calculation of total Engineering department cost : Given, Allocation of Maintenance cost to other…

Q: What are the factors affecting equipment costs?

A: Equipment cost is the total cost incurred to bring the equipment in the useable state. It includes…

Q: What amount should be capitalized as the cost of the new equipment?

A: As per the relevant IFRS "PPE", all the costs incurred by the Business Entity, to bring the Asset…

Q: Required: a) What is the total cost that should recorded as research and development cost? b) What…

A: Intangible assets are those assets which can neither be touched nor be seen. These include patent…

Q: What is the general rule for cost inclusion for plant assets?

A:

Q: What are the Nonmanufacturing costs?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: With reference to IAS 16 (Property, Plant and Equipment), discuss the differences between “the cost…

A: IAS 16 relates to the accounting for property, plant, and equipment unless another standard requires…

Q: Which of the following is not included as part of the cost of an item of property, plant and…

A: Property, Plant and Equipment refers to All fixed Asset having long useful life more than One year.…

Q: What is the process of allocating the cost of natural resources to expense as they are used?

A: Natural resources usually include oil reserves, coal deposits, and mineral deposits. The natural…

Q: What is the criterion a company uses to decide whether to include an expenditure in the cost of…

A: The criterion used by a company to include a cost in the cost of an asset is whether it is necessary…

Q: Which are three types of investment flows are associated with buying a piece of equipment?

A: It refers to the activities carried out by a company for acquisition of long-term assets. The…

Q: Research and development costs a. Are recorded as research and development assets. b. Are…

A: Research and development costs: Research and development costs refer to the expenditures spent on…

Q: All costs incurred to establish the technological feasibility of a computer software product to be…

A: As per IAS 38 Intangible asset is are identifiable non monetary asset that does not have physical…

Q: How does the materials requisition help safeguard a company’s assets?

A:

Q: .For external reporting purposes, the amount of inventoriable costs must be: our answer . For…

A: Inventoriable Cost: Inventoriable costs are those costs which are directly associated with the…

Q: Which of the following should be capitalized when a pieceof production equipment is acquired for a…

A:

Q: “Cost written off as depreciation on equipment already purchased is always irrelevant.” Do you…

A: Relevant cost: Relevant cost is the avoidable cost which incurred at the time of the decision-making…

Q: Of the following costs related to the development of mi one is not a part of depletion cost?

A: Deplation Cost One of two accounting systems for allocating the costs of extracting natural…

Q: Electirical costs to light the production facility, is it a indirect material or direct material?…

A: Direct material: Material which is used in manufacturing process and also inseparable from the…

Q: Determine the cost of the machine.

A: It is pertinent to note that as per IAS 16 all the costs that are incurred for an asset in order to…

Q: What was the acquisition cost of the equipment?

A: Given the salvage value = 15000 Useful life = 10 years Depreciation for 4th year = 63636 If the…

Q: What is the cost of the building? What is the cost of machinery and equipment?

A: Capitalisation of fixed assets means how much cost incurred for the acquisition of long term fixed…

Q: Classify the following fixed costs as normally being either committed or discretionary:a.…

A: Committed fixed costs are those costs that can not be reduced even for short periods of time without…

Q: Which of the following expenditures cannot be included in R&D costs? a. indirect costs b.…

A: R & D: R & D means Research and Development which indicates as a process of obtaining new…

Q: Which of the following expenditures incurred in connection with the acquisition of a piece of…

A: Property, plant, and equipment (fixed assets or operating assets) compose more than one-half of…

Q: Costs that are treated as assets until the product is sold are

A: Asset is a resource from which a entity expects future economic benefits from usage of such asset.

Q: Why should the total costs of the machine be viewed as an asset and allocated against the future…

A:

Q: Understand property, plant, and equipment and its related costs.

A: Business have several assets such as cash, inventories, accounts receivables, investments, PPEs…

Q: Which costs might be included in the initial cost of equipment?

A: Property, plant and equipment:   Property, plant and equipment are the tangible assets which are…

Q: What is the total cost of ownership concept? What are some of the challenges that must be overcome…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: Define the term salvage value of the equipment?

A:

Q: What is the process of allocating the cost of a plant asset over its useful life called?

A: Depreciation:Depreciation is the reduction in the value of an asset over its useful life. An asset…

Q: is used to spread the cost of an asset across its useful life rather than recognizing it all at…

A: Let's understand the basics, Asset is an item of property owned by a person or company, regarded as…

Q: Present value of decommissioning and restoration costs are capitalized as PPE and with a…

A: Decommissioning cost is the cost which will be incurred when the asset useful life is over or when…

Q: What are the elements of cost of an item of property, plant and equipment

A: Property, plant, and equipment are the fixed assets that are reported on the assets side of the…

Q: This topic is about Property, Plant, and Equipment   Based on the problem, What is the cost of…

A: In case of exchange of one asset with another asset, fair value of the asset is consideted for…

Q: Give example each of the types of costs that will be incurred under the following  Equipment and…

A: Equipment refers to the resources that are used in business for production or in providing services…

Q: how to allocate the cost of joint products and byproducts?

A: Costs incurred on joint products is known as joint costs. Those costs which are incurred on more…

Q: Which component would allow a large company to record the purchase of a $120 printer as an expense…

A: GAAP is the common set of accounting principles, standards, and procedures that the companies must…

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.