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2 years ago

the cost of land improvements are capitalized separately from land because land improvements tend to have a useful life.

Business

1 answer:

lisabon 2012 [21]2 years ago

4 0

Land improvements are capitalized separately from Land because land improvements have only a limited useful life.

Land is a special fixed asset which means that:

It is purchased for long term use
It is not depreciated because it lasts forever

Land improvements on the other hand, will not last forever. They will eventually wear out and need to be replaced. They are therefore capitalized separately from land so that they can be depreciated if need be.

In conclusion, land improvements are capitalized separately from land because they have a limited useful life.

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Answer:

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given data

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the dollar value of the ending inventory under variable costing would be

solution

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so value of ending inventory under variable production is $104375

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