Indicate Whether Each of the Following Items Normally Would Be

question 118

Essay

Indicate whether each of the following items normally would be considered a capital expenditure (C) or a revenue expenditure (R).
_____ 1. Replacement of shake roof with tile roof
_____ 2. Cost to replace light bulbs
_____ 3. Window-cleaning costs
_____ 4. Cost to rebuild company vehicle engine
_____ 5. Cost to construct parking lot
_____ 6. Cost of a wastebasket

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Definitions:

Average Inventory

The mean value of inventory within a certain period, calculated by adding the beginning inventory and ending inventory and dividing by two.

Direct Labor

The labor cost directly associated with the production of goods, including wages for workers who physically convert materials into the finished product.

Raw Materials

The basic materials from which products are made, typically not yet processed or used in manufacturing.

Finished Products

Goods that have completed the manufacturing process but have not yet been sold or distributed to end customers.