Question

Whole Grain Bakery purchases an industrial bread machine for $27,000. In addition to the purchase price, the company makes the following expenditures: freight, $1,700; installation, $3,400; testing, $1,200; and property tax on the machine for the first year, $540. What is the initial cost of the bread machine?

Answer 1

To find the initial cost of the bread machine, you need to add the purchase price and all the expenditures made in addition. The sum of the purchase price and the expenditures gives you the initial cost of the bread machine, which is $34,840.

Step-by-step explanation:

The initial cost of the bread machine is the sum of all the expenditures made in addition to the purchase price. Therefore, to find the initial cost, we need to add up the purchase price ($27,000) along with the expenditures: freight ($1,700), installation ($3,400), testing ($1,200), and property tax for the first year ($540).

Initial cost of the bread machine = Purchase price + Expenditures

Initial cost = $27,000 + $1,700 + $3,400 + $1,200 + $540

Initial cost of the bread machine = $34,840.