Sara Constructs a Small Storage Shed for Resale to Customers

question 4

Essay

Sara constructs a small storage shed for resale to customers and incurs the following costs:
$$\begin{aligned}\$ 3,000 & \text { Direct labor } \\1,500 & \text { Direct materials } \\700 & \text { Other direct costs } \\300 & \text { Allocated indirect costs }\end{aligned}$$
a.What is Sara's basis in this storage shed?
b.Sara normally sells the storage sheds for $7,000 each.John,one of the workers who builds the storage sheds,buys one for $5,000.What is John's basis in his storage shed?

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Definitions:

In Vivo Observation

A method used by behaviourally oriented therapists to determine how environmental variables affect a behaviour of concern, in which a clinician may record a running narrative of events, using pencil and paper, video, or still camera, in the client’s everyday environment. More commonly, observations are made by participant observers, key people in the client’s environment, and reported to the clinician. See also analogue observational setting.

Millon Clinical Multiaxial Inventory (MCMI)

An objective test of personality developed to help clinicians make diagnostic judgments within the multiaxial DSM system, especially in the personality disorders found on Axis II.

Personality Disorders

Mental disorders characterized by enduring maladaptive patterns of behavior, cognition, and inner experience, exhibited across many contexts and deviating from those accepted by the individual's culture.