Determine the costs to be capitalised

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Reference no: EM131340936

Autocar Inc, a motor vehicle manufacturer, has a research division that worked on the following projects during 2004:

Project 1 - The design of a steering mechanism that does not operate like a conventional steering wheel, but reacts to the impulses from a driver's fingers.

Project 2 - The design of a welding apparatus that is controlled electronically rather than mechanically. The following is a summary of the expenses of the particular department:

Amount in thousands of euro	General	Project 1	Project 2
Material and services	128	935	620

Labour
Direct Labour	-	620	320
Department head salary	400	-	-
Administrative Personnel	725	-	-

Overhead
Direct	-	340	410
Indirect	270	110	60

The departmental head spent 15 per cent of his time on Project 1 and 10 per cent of his time on Project 2.

Determine the costs to be capitalised.

Reference no: EM131340936

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