Conceptual components of asset cost The new accountant for Mactaggart Industries is wondering how to calculate the cost of a new machine the company has just installed. Explain briefly whether or not you think each of the following items should be part of the machine’s cost, and why:

1 the invoice price of the machine 2 GST paid on the machine 3 shipping charges to get the machine to the company’s factory 4 the cost of the factory manager’s trip to the machine manufacturer’s plant to choose the machine 5 the cost of painting the machine light green, as other machines in the factory are painted 6 estimated revenue lost because the machine arrived late 7 the cost of substandard products made while the factory personnel were learning how to operate the machine (all thrown away so as not to damage the company’s reputation for quality products)

8 interest cost on the bank loan used to finance the machine’s purchase 9 the cost of moving three other machines in the factory to make room for the new one.