Harrisburg Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $5,000,000 on January 1, 2014. Harrisburg expected to complete the building by December 31, 2014. Harrisburg has the following debt obligations outstanding during the construction period.

Construction loan-12% interest, payable semiannually, issued December 31, 2013 $2,000,000

Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2015 1,400,000

Long-term loan-11% interest, payable on January 1 of each year; principal payable on January 1, 2018 1,000,000 Collapse question part

(a) Assume that Harrisburg completed the office and warehouse building on December 31, 2014, as planned at a total cost of $5,200,000, and the weighted average amount of accumulated expenditures was $3,600,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.)