Assume that during a year, a table manufacturing company

Produced 900,000 finished tables incurring

Raw material costs of €9 million,

Direct labour conversion costs of €18 million, and

Production overhead costs of €1.8 million.

Scrapped 1,000 tables (attributable to abnormal waste) incurring

Raw material costs of €10,000 and

Labor and overhead conversion costs of €20,000.

Spent

€1 million for freight delivery charges on raw materials and

€500,000 for storing the finished goods as inventory.

What should be expensed and what should be capitalized?

Answer rating: 100% (QA)

Costs that should be expended 1 1 Million for freight delivery Charges on raw ... View the full answer