Question

Granite Company purchased a machine costing $132,000, terms 1/10, n/30. The machine was shipped FOB shipping point and freight charges were $3,200. The machine requires special mounting and wiring connections costing $11,200. When installing the machine, $2,700 in damages occurred. Compute the cost recorded for this machine assuming Granite paid within the discount period.

Answer 1

Granite Company purchased a machine costing $132,000, terms 1/10, n/30. The machine was shipped FOB shipping point and freight charges were $3,200. The machine requires special mounting and wiring connections costing $11,200. When installing the machine, $2,700 in damages occurred.The Total cost recorded to get the ready to use: $ 147,780

Step-by-step explanation:

From the above question we get the following information

Equipment cost: 132,000 x (1 - 1%) = 130,680

shipping cost: 3,200

special wiring connections 11,200

installation cost 2,700

Total cost to get the machinery ready to use: $ 147,780

It is important to note that the cost incurred to get the equipment ready for usage and production must be included while calculating the equipment cost.