CC Capitalizing Inventory Costs when Purchasing Fixed Assets Research Paper

I’m working on a business case study and need support to help me learn.

Hiking Gear, Inc. manufactures its own backpacks, marketed to customers primarily for camping and travel needs. The company is reviewing its policy for capitalizing inventory costs and wants your help to determine whether certain costs should be capitalized as part of inventory. Analyze the following costs, including an explanation of your position and the authority for it:

Canvas used in the construction of the packs.

Zippers purchased from Zen Zips (a supplier), including the cost of freight for the zippers to be shipped.

1. Wages paid to employees operating industrial sewing machines.
2. Electric utility bills related to operation of the plant.
3. Contract labor paid to update and maintain the company website, through which customers can directly place backpack orders.