33. During self-construction of an asset by Cisco Construction Company, the following were among the costs incurred:

Fixed overhead for the year $1,000,000

Portion of $1,000,000 fixed overhead that would

be allocated to asset if it were normal production 80,000

Variable overhead attributable to self-construction 120,000

What amount of overhead should be included in the cost of the self-constructed asset?

Question 33Answer

a.

$80,000

b.

$ 0

c.

$200,000

d.

$120,000