Autocar Inc, a motor vehicle manufacturer, has a research division that worked on the following projects during 2004:
Project 1 - The design of a steering mechanism that does not operate like a conventional steering wheel, but reacts to the impulses from a driver's fingers.
Project 2 - The design of a welding apparatus that is controlled electronically rather than mechanically. The following is a summary of the expenses of the particular department:
|
Amount in thousands of euro
|
General
|
Project 1
|
Project 2
|
|
Material and services
|
128
|
935
|
620
|
|
|
|
|
|
|
Labour
|
|
|
|
|
|
-
|
620
|
320
|
|
|
400
|
-
|
-
|
|
|
725
|
-
|
-
|
|
|
|
|
|
|
Overhead
|
|
|
|
|
|
-
|
340
|
410
|
|
|
270
|
110
|
60
|
The departmental head spent 15 per cent of his time on Project 1 and 10 per cent of his time on Project 2.
Determine the costs to be capitalised.