Feelwell Corporation manufactures aspirin.Its gross receipts for the last 10 years have averaged just over $1 million.The corporation must capitalize costs of direct materials and direct labor but may expense any indirect costs.

Question

Quizplus · Accepted Answer

The IRS requires businesses to capitalize not only direct materials and direct labor costs but also an allocable portion of indirect costs that can be reasonably allocated to the production of property.

Feelwell Corporation Manufactures Aspirin