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Indicate Whether Each of the Following Expenditures Should Be Classified

question 223

Essay

Indicate whether each of the following expenditures should be classified as land (L), land improvements (LI), buildings (B), equipment (E), or none of these (X).
_____ 1. Parking lots
_____ 2. Electricity used by equipment
_____ 3. Sewage system cost
_____ 4. Interest on building construction loan
_____ 5. Cost of trial runs for equipment
_____ 6. Drainage costs
_____ 7. Cost to install equipment
_____ 8. Fences
_____ 9. Unpaid (past) property taxes assumed
_____ 10. Cost of tearing down a building when land and a building on it are purchased


Definitions:

Reducing Costs

A process aimed at lowering the overall expenses involved in running a business or producing goods and services.

Supply Management

The practice of managing the supply chain activities and relationships to achieve competitive advantage and optimize cost.

Life Cycle Costing

The total cost of ownership of a product or system over its entire lifespan.

Operating Costs

Expenses associated with the day-to-day functions of a business.

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