A capital acquisitions manager recently purchased equipment needed to begin production of new inventory. The listed purchase cost of the equipment from a vendor was $70,000. In addition, six other costs related to the equipment were incurred at the time of acquisition and in the first month of operations. These six related costs are displayed in the illustration below. Purchase Cost of Equipment and Six Related Costs Total = $110,000 Purchase Price $70,000
1. Sales Tax $5,600 2. Shipping and Handling $6,200 3. Installation and Preparation $ 12,700 4. Testing and Safety Inspection $8,400 5. Employee Training for Operations $5,500 6. Maintenance for First Month of Operations $1,600
