Question

The cost at which a company records purchases of machinery and equipment should include which of the following?
a. Operating costs.
b. Purchase price.
c. Installation.
d. Shipping fees.
e. Taxes.

Answer 1

The cost at which a company records purchases of machinery and equipment should include all the under listed:

• Operating costs
• Purchase price
• Installation.
• Shipping fees
• Taxes

What is acquisition cost?

Acquisition cost refers to all the cost associated with the purchase of an asset.  When calculating how a company records purchases of machinery and equipment, it should be the all inclusive cost of the equipment.

The cost acquisition cost should include :

• All transportation cost

• Installation cost
• Site preparation
• Sales or other taxes and testing costs prior to placing the equipment into production.

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