Which of the Following Research and Development Related Costs Should

question 17

Multiple Choice

Which of the following research and development related costs should be capitalized and amortized over current and future periods?

• A) Labor and material costs incurred in building a prototype model.
• B) Cost of testing equipment that will also be used in another separate research and development project scheduled to begin next year.
• C) Administrative salaries allocated to research and development.
• D) Research findings purchased from another company to aid a particular research project currently in process.

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Definitions:

Assignable Causes

Sources of variation in a process or system that can be identified and usually eliminated, distinguished from random causes that are inherent in the system.

Production Environment

The setting where software and systems are deployed and operated for end-users in real-world scenarios, often contrasted with development or testing environments.

Control Chart

A graphical tool used to monitor, control, and improve process performance over time by detecting significant variations.

Standard Deviations

Measurements indicating the amount of variation or spread in a set of values, highlighting how much each number differs from the mean.