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Crane Reclaimers entered into a contract with Cheyenne Demolition to manage the processing of recycled materials on Cheyenne various demolition projects. Services for the 3-year
Crane Reclaimers entered into a contract with Cheyenne Demolition to manage the processing of recycled materials on Cheyenne various demolition projects. Services for the 3-year contract include collecting, sorting, and transporting reclaimed materials to recycling centers or contractors who will reuse them. Crane incurs selling commission costs of $1,890 to obtain the contract. Before performing the services, Crane also designs and builds receptacles and loading equipment that interfaces with Cheyenne demolition equipment at a cost of $26,910. These receptacles and equipment are retained by Crane and can be used for other projects. Cheyenne promises to pay a fixed fee of $12,270 per year, payable every 6 months for the services under the contract. Crane incurs the following costs: design services for the receptacles to interface with Cheyenne equipment $3,150, loading equipment controllers $5,800, and special testing and OSHA inspection fees $1,890 (some of Cheyenne projects are on government property). Determine the costs that should be capitalized as part of Crane Reclaimers revenue arrangement with Cheyenne Demolition. (If answer is 0, please enter O. Do not leave any fields blank.) Commission Costs 0 Design Services 0 Cost of loading Equipment Controllers 0 Inspection Fees 0 Receptacles and loading Equipment $ Cheyenne also expects to incur general and administrative costs related to this contract, as well as costs of wasted materials and labor that likely cannot be factored into the contract price. Can these costs be capitalized? General and administrative costs Costs of wasted materials and labor
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