Dorman Company purchased new machinery for its production process.The following costs were incurred for the new machine: Which costs should be added to the cost of the machine?

Question

Dorman Company purchased new machinery for its production process.The following costs were incurred for the new machine:  Which costs should be added to the cost of the machine?

Quizplus · Accepted Answer

The costs that should be added to the cost of the machine are the purchase price of $30,000, installation costs of $10,000, and testing costs of $2,000. Therefore, the total cost of the machine is $42,000 (purchase price + installation costs + testing costs). The option D is not correct as it is not mentioned in the question.

Dorman Company Purchased New Machinery for Its Production Process