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c. Materials and overhead only
d. Materials, labor, and overhead
33. Which of the following assets do not qualify for capitalization
of interest costs incurred during construction of the assets?
a. Assets under construction for an enterprise's own use.
b. Assets intended for sale or lease that are produced as discrete
projects.
c. Assets financed through the issuance of long-term debt.
d. Assets not currently undergoing the activities necessary to
prepare them for their intended use.
34.
Assets that qualify for interest cost capitalization include
a. assets under construction for a company's own use.
b. assets that are ready for their intended use in the earnings of the
company.
c. assets that are not currently being used because of excess
capacity.
d. All of these assets qualify for interest cost capitalization.
35. When computing the amount of interest cost to be capitalized,
the concept of "avoidable interest" refers to
a. the total interest cost actually incurred.
b. a cost of capital charge for stockholders' equity.