Which of the Following Costs Should Be Capitalized in the Year

question 77

Multiple Choice

Which of the following costs should be capitalized in the year incurred?

• A) Research and development costs.
• B) Costs to internally generate goodwill.
• C) Organizational costs.
• D) Costs to successfully defend a patent.

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Definitions:

Long-Run Average Total Cost

The average cost per unit of output when all factors of production, including capital, are variable in the long term.

Slope

In mathematics, the slope of a line is a number that describes both the direction and the steepness of the line.

Average Total Cost

Total production expenses per unit of output, calculated by dividing the production costs by the quantity produced.

Mixers

Devices used to blend or mix ingredients together in cooking or in beverage preparation; also refers to non-alcoholic beverages mixed with alcoholic drinks.