To automate one of its production processes, Milwaukee Corporation bought three flexible…

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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 cost $35,000. Six foremen, each earning $15 an hour, 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 $1,500. Determine the cost basis (amount to be capitalized) for these cells.

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