Assume that Trader Pete's, an organic food retailer in the United States, recently purchased a new refrigeration system for its Washington, DC, store.Trader Pete's paid $1.3 million for the refrigeration unit and paid an additional $120,000 to modify the unit to meet its specific needs.Trader Pete's paid $55,000 for the transportation and installation of the unit, plus $48,000 for an annual insurance premium for the first year, which begins next month.Finally, assume that Trader Pete's hired a refrigeration technician, who is charged with the maintenance of the unit; that technician's annual salary is $80,000.How much should Trader Pete's record as the acquisition cost of the refrigeration unit?
A)$1,300,000
B)$1,420,000
C)$1,475,000
D)$1,523,000
E)$1,603,000

Question

Quizplus · Accepted Answer

The acquisition cost of the refrigeration unit includes the purchase price, modifications to meet specific needs, and transportation and installation costs, totaling $1,475,000 ($1,300,000 + $120,000 + $55,000). Annual insurance and the technician's salary are operating expenses, not part of the acquisition cost.

Assume That Trader Pete's, an Organic Food Retailer in the United