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In the year ended May 31, 20X5, Hardware Inc. purchased new machinery from an overseas manufacturer. The cost of the machine totalled $500,000. Shipping and duties incurred by the company totalled $35,000. Hardware needed to bring a mechanic from overseas to assist with the installation. Costs of installation totalled $15,000. A rebate of $40,000 was given to Hardware because this was the company’s second machine purchase from the manufacturer. Prior to delivery, to prepare for installation of the new machine, Hardware incurred labour costs of $12,000 and general overhead of $9,000.

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