Question 7 (a) Jojo Sdn Bhd ordered from Koko Sdn Bhd a piece of specialised heavy equipment for its operations. Details of cost incurred are: RM 500,000 12,000 10,000 6,000 Purchase price Import duty Engineer's fees (for inspection and installation) Shipping and transport costs Site preparation costs: Direct labour costs Concrete reinforcement Maintenance and service contract for 1 year 5,000 4,000 3,000 Jojo Sdn Bhd received a trade discount of 10% on list price and 5% cash discount on early settlement. Jojo Sdn Bhd obtained a loan of RM500,000 to finance the purchase. Interest expense on the loan for the year was RM25,000. The equipment has a useful life of 5 years. Jojo Sdn Bhd estimates that dismantling cost to be RM3,500 and legal obligation to restore the site is RM6,500. Both these values are stated in present values. Required: Calculate the initial cost of the plant. Your answer should explain the reasons why some of the costs are not included in the calculation. [10 marks]