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Liono4ka [1.6K]
3 years ago
5

Whole Grain Bakery purchases an industrial bread machine for $30,000. In addition to the purchase price, the company makes the f

ollowing expenditures: freight, $2,000; installation, $4,000; testing, $1,500; and property tax on the machine for the first year, $600. What is the initial cost of the bread machine?
Business
1 answer:
Andrei [34K]3 years ago
6 0

Answer:

The initial cost of the bread machine is $37,500

Explanation:

Initial cost is the sum of all the expenditure incurred from the purchase of asset to make it usable for the business. It includes purchase price, transportation cost, testing costs etc.

Bread Machine

Purchase price    $30,000

Freight                 $2,000

Installation           $4,000

Testing                <u>$1,500   </u>

Total Initial Cost <u>$37,500</u>

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