(Directly Attributable Costs)

(LO 4, 6 )

DAC Manufacturing Inc. is installing a new plant at its production facility. It has incurred these costs:

Cost of the manufacturing plant (cost per supplier's invoice plus taxes)	$2,500,000
Initial delivery and handling costs	200,000
Cost of site preparation	600,000
Consultants used for advice on the acquisition of the plant	100,000
Interest charges paid to supplier of plant for deferred credit	200,000
Estimated dismantling costs to be incurred after seven years	300,000
Operating losses before commercial production	400,000

Instructions

Determine which costs DAC Manufacturing Inc. can capitalize in accordance with IAS 16. ( in compound way)