Determine cost basis for three flexible manufacturing cells

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Reference no: EM13796422

To automate one of its production processes, Milwaukee Corporation bought three flexible manufacturing cells at a price of $500,000 each. When they were delivered, Milwaukee paid freight charges of $25,000 and handling fees of $12,000. Site preparation for these cells costs $35,000. Six foremen, each earning $15 an hour, each worked five-40 hour weeks to set up and test the manufacturing cells. Special wiring and other materials applicable to the new manufacturing cells cost $1500. Determine the cost basis (amount to be capitalized) for the three flexible manufacturing cells. Note: A cash flow diagram is not required.

Reference no: EM13796422

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