Set-up or dismantling costs


The Sheila Cabot Construction Company (SCCC) is building a local stadium. They need an office at the stadium site. SCCC can build the office themselves with material costing $50,000 and labor costs of $13,000. When the company takes apart the building at the end of the project, 20% of the material would be reusable. Alternatively, SCCC can rent a pre-fabricated building at a cost of $1000 per month with no set-up or dismantling costs. It will benefit SCCC to build the office if it expects the stadium project to exceed

a) 36 months

b) 50 months

c) 53 months

d) 63 months

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Accounting Basics: Set-up or dismantling costs
Reference No:- TGS086185

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