Question: Case 9-14 Fixed Overhead Two alternatives have been advocated with respect to the recording of fixed manufacturing overhead as an element of the cost of

Case 9-14 Fixed Overhead

Two alternatives have been advocated with respect to the recording of fixed manufacturing overhead as an element of the cost of plant assets constructed by a company for its own use.

Required:

Discuss the circumstances or rationale that support or deny the application of these methods?

It should be excluded completely.

It should be included at the same rate as is charged to normal operations.

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