So this is what you need to do. For starters, change script=r"C:\Python32\testapplication.py"
to script=r"testapplication.py"
Then, put ALL the files to need to convert into C/python32
including the setup file. Then what you wan to do is get your command line up, and type the following commands: (assuming that you're cx_freeze file is named setup.py):
cd
cd python32
python setup.py build
And then you should have a build folder in that directory containing the exe file.