Final answer:
Extraordinary repairs to long-lived assets are capitalized, enhancing the asset's value and useful life. This aligns with a shift towards durability, repairability, and high-quality goods over disposable products, especially when manufacturing new items or disposing old ones becomes costly.
Step-by-step explanation:
Extraordinary repairs to long-lived assets are capitalized because they are large expenditures that increase the asset’s useful life. Instead of being expensed immediately, these costs are added to the asset’s value on the balance sheet and depreciated over the extended life of the asset.
In a scenario where buying a newly manufactured item becomes expensive and the cost of throwing away an old device increases, repair labor may become more affordable. This shift in economic conditions could lead to a departure from a disposable economy, or planned obsolescence, favoring instead durable goods and lifetime warranties.
Products would be designed for upgradeability and repair, valuing high-quality goods and craftsmanship. This is because the environmental and economic costs of manufacturing new items and disposing of old ones are significantly higher than repairing them.