Calculator #: 10 pts) A Scranton Industrial ral Manufacturing company decided to

Question

Calculator #: 10 pts) A Scranton Industrial ral Manufacturing company decided to automate one of Its pro is processes. It purchased three (3) flexible manufacturing cells at a price of $400,000 eacue The total freight charges paid paid. The company paid $50,000 to prepare the site for the cells. In addition, 8 emplo earning $15.00 per hour worked five weeks to set up and prepare the new sy work week is 40 hours per worker. Other materials applicable to the new ce at the time of delivery was $30,000 and a special handling fee o f $15,000 was ch system. Their standard a. (5 pts) Determine the cost basis for the new cells. Handling See-815.??? repore ostS3006 w ee C 1?321 sooo (5 pts) The useful life of the equipment is 5 years and ISI will use double declining balance as it method of depreciation until it has to switch to SL. Given the Cost basis that you determined in (a) above, determine which year that ISI will switch to SL. Show all of your work to receive any credit for this part of the problem. ost basis b.

Explanation / Answer

Determination of cost basis for new cell Details Calculations Amount in $ Flexible Manufacturing cell =400000*3 1200000 Freight Charges paid 30000 Handling Fees 15000 Site preparation expenses 50000 Capitalized Wages =8*5*40*15 24000 Other materials capitalized 2000 Cost basis 1321000 As per Chegg Policy, we are supposed to answer maximum of one question at a time. Thank you

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