Sara Constructs a Small Storage Shed for Resale to Customers

question 84

Essay

Sara constructs a small storage shed for resale to customers and incurs the following costs:
$\begin{array}{ll}\$ 3,000 & \text { Direct labor } \\1,500 & \text { Direct materials } \\700 & \text { Other direct costs } \\300 & \text { Allocated indirect costs }\end{array}$

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:

Hassles

Minor irritations or annoyances that, although not significantly distressing individually, can accumulate to cause stress.

Problem-Focused Coping

A strategy whereby individuals deal with stress by tackling the problem that is causing the stress, directly aiming to solve or mitigate the issue.

Emotion-Focused Coping

A coping strategy aimed at managing and working through the emotions caused by stressful situations, rather than trying to change the situation itself.

Catecholamines

Organic compounds including epinephrine (adrenaline), norepinephrine, and dopamine that function as hormones or neurotransmitters and are involved in bodily responses to stress.