Reference no: EM133073805
Questions -
Q1. Various equipment used by Honesty Co. in its operations are either purchased from dealers or self constructed. The following items for two different types of equipment were recorded during the calendar year 2020.
Manufacturing equipment (self constructed)
Materials and purchase parts at gross invoice price (Honesty failed to take the 2% cash discount), P500,000
Labor Cost, P200,000
Overhead Cost (Fixed P55,000 and Variable P67,000), P122,000
Gain on Self Construction, P80,000
Installation Cost, P27,000
Testing Cost, P18,000
Salary of the Engineer, P33,500
What is the total cost of self-constructed equipment?
Q2. Various equipment used by Honesty Co. in its operations are either purchased from dealers or self constructed. The following items for two different types of equipment were recorded during the calendar year 2020.
Manufacturing equipment (purchased)
Cash paid for equipment P176,000
Freight and insurance cost while in transit P3,500
Insurance premium paid during the first year of operations related to this equipment P6,000
Cost of moving equipment into place at store, P1,600
Wage cost for technicians to test equipment insurance premium paid during first year of operation on this equipment, P10,000
Special plumbing fixtures required for this equipment P10,200
Repair cost in first year of operations related to this equipment, P1,470
Cash allowance granted because the new machine proved to be inferior quality, P20,000
Operating cost during first month of regular use P46,000
Non Refundable Taxes related to the acquisition, P10,000
What is the total cost of store equipment purchased?