The cost of self-constructed fixed assets should:
A) Include allocated indirect costs just as they are for production of products.
B) Include only incremental indirect costs.
C) Include only specifically identifiable indirect costs.
D) Not include indirect costs.

Question

Quizplus · Accepted Answer

Self-construction of fixed assets involves many indirect costs such as depreciation, insurance, taxes, utilities, and repairs. Thus, the cost of self-constructed fixed assets should include allocated indirect costs just as they are for the production of products. This will ensure that the cost of self-constructed assets is accurately reflected in the financial statements.

The Cost of Self-Constructed Fixed Assets Should