Cost of a SelfConstructed Asset The company constructed its

Cost of a Self-Constructed Asset

The company constructed its own building. The cost of materials was $400,000. Labor cost incurred on the construction project was $600,000. Total overhead cost for the company for the year was $8,000,000; total labor cost (including the cost of construction) was $4,000,000. Interest incurred to finance the construction cost was $140,000.

Compute the total cost of the building.

Solution

Workings