Harshman Company constructed a building for its own use. The company incurred costs of $40,000 for materials and supplies, $60,000 for direct labor, and $6,000 for a supervisor's overtime that was caused by the construction. Harshman uses a factory overhead rate of 50% of direct labor cost. Before construction, the company had received a bid of $149,000 from an outside contractor. Assuming common practice is followed, at what value should Harshman capitalize the building?
Harshman Company constructed a building for its own use. The company incurred costs of $40,000 for materials and supplies, $60,000 for direct labor, and $6,000 for a supervisor's overtime that was caused by the construction. Harshman uses a factory overhead rate of 50% of direct labor cost. Before construction, the company had received a bid of $149,000 from an outside contractor. Assuming common practice is followed, at what value should Harshman capitalize the building?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Harshman Company constructed a building for its own use. The company incurred costs of $40,000 for materials and supplies, $60,000 for direct labor, and $6,000 for a supervisor's overtime that was caused by the construction. Harshman uses a factory
Assuming common practice is followed, at what value should Harshman capitalize the building?
I answred 180500 which was incorrect. I need to know the right answer please with explanation.
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