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Research and Development Costs Danielson Inc. incurred the following costs during 2016: Required: 1. Which...

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Accounting

Research and Development Costs

Danielson Inc. incurred the following costs during 2016:

Required:

1. Which of the following are included in R&D costs of the current period?

a. current-period depreciation expense on the building housing the R&D activities Research and development
b. cost of a market research study Not research and development
c. current-period depreciation expense on a machine used in multiple R&D activities Research and development
d. salary of the director of R&D Research and development
e. salary of the vice president who spends one-third of her time overseeing the R&D activities Research and development
f. pension costs for the salaries in Items d and e Research and development

2. R&D is expensed as incurred because:

  1. There is a high degree of uncertainty about which R&D projects will produce benefits and which will not.
  2. It's easier to implement.
  3. Expensing all R&D results in greater comparability between companies.

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