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What total amount should be capitalized as cost of machine

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Question - Loren Company uses many kinds of machines in operations. The entity acquires some machines from others and constructs some machines itself. The following information pertains to a machine constructed by Loren:

Cost of material to construct 700,000

Labor cost 430,000

Allocated overhead costs - electricity, factory space, etc. 220,000

Allocated interest cost of financing machine 100,000

Cost of installation 120,000

Insurance for one year 20,000

Profit saved by self-construction 150,000

Safety inspection cost prior to use 40,000

Required - What total amount should be capitalized as cost of the machine?

Reference no: EM133179879

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