During 2014, Luxe Company installed a production assembly line to manufacture furniture. In 2014, Luxe Company purchased a new machine and rearranged the assembly line to install this machine. The rearrangement did not increase the estimated useful life of the assembly line, but it did result in significantly more efficient production. The following expenditures were incurred in connection with this project: Machine 150,000 Parts added in rearranging the assembly line to provide future benefits 80,000 Labor to install machine 28,000 Labor and overhead to rearrange the assembly line 36,000 What amount of the above expenditures should be capitalized in 2014? a. 150,000 c. 214,000 b. 178,000 d. 294,000
During 2014, Luxe Company installed a production assembly line to manufacture furniture. In 2014, Luxe Company purchased a new machine and rearranged the assembly line to install this machine. The rearrangement did not increase the estimated useful life of the assembly line, but it did result in significantly more efficient production. The following expenditures were incurred in connection with this project: Machine 150,000 Parts added in rearranging the assembly line to provide future benefits 80,000 Labor to install machine 28,000 Labor and overhead to rearrange the assembly line 36,000 What amount of the above expenditures should be capitalized in 2014? a. 150,000 c. 214,000 b. 178,000 d. 294,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During 2014, Luxe Company installed a production assembly line to manufacture furniture. In 2014,
Luxe Company purchased a new machine and rearranged the assembly line to install this machine. The
rearrangement did not increase the estimated useful life of the assembly line, but it did result in
significantly more efficient production. The following expenditures were incurred in connection with
this project:
Machine 150,000
Parts added in rearranging the assembly line to
provide future benefits 80,000
Labor to install machine 28,000
Labor and overhead to rearrange the assembly line 36,000
What amount of the above expenditures should be capitalized in 2014?
a. 150,000 c. 214,000
b. 178,000 d. 294,000
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