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7 April, 00:03

Holiday Laboratories purchased a high-speed industrial centrifuge at a cost of $420,000. Shipping costs totaled $15,000. Foundation work to house the centrifuge cost $8,000. An additional water line had to be run to the equipment at a cost of $3,000. Labor and testing costs totaled $6,000. Materials used up in testing cost $3,000. The capitalized cost is:

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  1. 7 April, 00:10
    0
    The correct answer to the following question is $455,000.

    Explanation:

    For calculating the capitalized cost here all the cost given in the question would be included because all the given cost are incurred by the holiday laboratories to make the asset ready for use. Thus -

    High speed industrial centrifuge

    +

    Shipping cost

    +

    Foundation work

    +

    Equipment cost

    +

    Labor and testing cost

    +

    Material cost

    = $420,000 + $15,000 + $8000 + $3000 + $6000 + $3000

    = $455,000
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