The cost of self-constructed assets includes a reasonable allowance for overhead specific to the construction, and this overhead should be applied at a rate approximating practical capacity.

Question

Quizplus · Accepted Answer

This statement is true. The cost of self-constructed assets includes overhead specific to the construction, such as labor, materials, and other indirect costs. A reasonable allowance for overhead should also be included, which should be applied at a rate that approximates practical capacity. This allows for a more accurate calculation of the total cost of the asset.

The Cost of Self-Constructed Assets Includes a Reasonable Allowance for Overhead