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Point 1: Span Constructions Ltd incurred certain costs in the process of winning a successful bid on a contract with the South Australian government to build a new bridge over the River Torrens. The costs arose during the proposal and contract negotiations and they included costs associated with the initial design for the bridge.
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Question 1: Explain how Span Constructions Ltd should account for these costs. Support your answer with appropriate reference to AASB 15.
For Eckstein Company, the predetermined overhead rate is 137% of direct labor cost. During the month, Eckstein incurred $104,000 of factory labor costs, of which $85,200 is direct labor and $18,800 is indirect labor. Actual overhead incurred was $121..
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