Asset value of the new machinery

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Reference no: EM131003956

A company decides to replace one of its production lines with new machin- ery. All the costs associated with the exercise are grouped together by the accountant in the same account, pending later analysis. The items appearing in the account after three months are:

	€
Removal of old machinery	2 800
Installation of new power lines	350
Resurfacing factory floor	825
Purchase of new machines	62 100
Transport of machines to factory	3 200
Hire of crane to position new machines	450
Servicing after first month's production	375
Replacement of conveyor damaged in production	580
Engineer's fee to check installation	250

In addition to the above items, the payroll records show that the company's maintenance crew spent 300 hours on installing the machines. The usual charge-out for labour is €5.75 per hour.

Which of the above items should be part of the asset value of the new machinery?

Reference no: EM131003956

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