What amount of overhead should be included in the cost of


During self-construction of an asset by Richardson Company, the following were among the costs incurred:

Fixed overhead for the year $1,000,000

Portion of $1,000,000 fixed overhead that would

be allocated to asset if it were normal production 80,000

Variable overhead attributable to self-construction 100,000

What amount of overhead should be included in the cost of the self-constructed asset?

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