IN CLASS EXERCISE

Triple M Berhad is a pharmaceutical company that located in Bandar Baru Bangi, Selangor.
The company introduced a new production line in in January 2015. The new line is expected
to produce products that will give the company competitive advantages for the next 10 years.
The expenditures incurred for this new line include the following:

Expenditure incurred for Production Line RM

Employee costs in fixing the interior of the factory to suit the 50,000
production line
Preparing the factory site 100,000
Purchasing the machines for the line 5,000,000
Installation and assembly costs of the machines 55,000
Cost of initial testing 40,000
Professional fees in assessing the function and installation 20,000
Cost of the grand opening of the new line 30,000
Cost of introducing a new product manufactured by this new 950,000
production line
Administration and other general overhead costs in studying 25,000
and following up the installation

Calculate the cost of the new production line.