Porter Entity is building a new office building. After building the infrastructure for first floor, the plans were amended to include underground parking. In order to extend the foundation to create the garage, the first floor infrastructure had to be torn out. This set back the project by three months which resulted in an additional $4 million in labor costs and raised the material cost of the project by $700,000. These costs should be capitalized.

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The Answer of Porter Entity is building a new office building. After building the infrastructure for first floor, the plans were amended to include underground parking. In order to extend the foundation to create the garage, the first floor infrastructure had to be torn out. This set back the project by three months which resulted in an additional $4 million in labor costs and raised the material cost of the project by $700,000. These costs should be capitalized.

Porter Entity Is Building a New Office Building