Answer:
The total cost to be capitalized for each of these two pieces of equipment:
Purchase equipment = $180,708
Construction equipment = $678,432
Explanation:
a) Data and Calculations:
Purchase
Cash paid for equipment, including sales tax of $7,400 $155,400
Freight and insurance cost while in transit                            2,960
Cost of moving equipment into place at factory                   4,588
Wage cost for technicians to test equipment                       5,920  
Special plumbing fixtures required for new equipment      11,840
Total cost to be capitalized =                                           $180,708
Construction
Material and purchased parts (gross cost $296,000; failed to take 2% cash discount)                                  $296,000 
Imputed interest on funds used
 during construction (stock financing) 20,720
Labor costs                                          281,200 
Allocated overhead costs:
Fixed                                 $29,600
Variable                             $44,400     74,000
Cost of installing equipment                 6,512
Total capitalized costs =                 $678,432