When a company purchases land as a site for a plant, interest costs capitalized during the period of construction are part of the:

Question

Quizplus · Accepted Answer

Interest costs capitalized during the period of construction are part of the cost of the plant. The cost of the land is the amount paid for the land only, and the cost of acquisition includes any other costs associated with acquiring the land (e.g. legal fees). Period costs are expenses that are not directly related to the production of a good or service, such as selling and administrative expenses.

When a Company Purchases Land as a Site for a Plant