Answer:
i. The total cost for Purchase equipment
Particulars Amount
Cash paid for equipment, including $130,200
sales tax of $6,200
Freight and insurance cost while $2,480
in transit
Cost of moving equipment into $3,844
place at factory
Wage cost for technicians to test $4,960
equipment
Special plumbing fixtures required for $9,920
new equipment <u> </u>
Total Purchase cost <u>$151,404</u>
<u />
ii.The total cost of construction price of equipment
Particulars Amount
Material and purchase part $245,520
Labor Cost $235,600
Overhead Cost $62,000
Cost of Installing equipment <u>$5,456 </u>
total cost of construction price of equipment <u>$548,576</u>
<u />
<u>Workings</u>
Material and purchased parts = Gross cost - Cash discount on gross cost
=$248,000 - (1%*$248,000)
=$248,000 - $2480
=$245,520
